LONDON: Copper prices rose on Thursday on firmer economic data from top metals consumer China along with hopes for more stimulus, but a stronger dollar limited gains.

Three-month copper on the London Metal Exchange (LME) was up 0.6% at $8,017 per metric ton by 1000 GMT, having shed 10% since the start of August.

Data on Wednesday showed China’s economy grew at a faster-than-expected clip in the third quarter while consumption and industrial activity in September also surprised on the upside.

“We’ve been seeing strong investment growth in China’s infrastructure sector all year, underpinning construction activity at a time when the property sector is in the doldrums,” said Edward Gardner, commodities economist at Capital Economics.

“There’s been a lot of hope for additional stimulus, but if it does come through, we see it putting a floor under overall construction activity, but not leading to a big pick-up.”

Copper propped up by weaker dollar, nervous over Mideast

Copper and other base metals were expected to remain weighed down around current levels for the rest of the year amid worries that U.S. interest rates will have to remain high to dampen inflation, he added.

Capping gains was a firm dollar index, underpinned as the U.S. 10-year yield neared 5% ahead of closely-watched remarks by Federal Reserve Chair Jerome Powell.

A stronger dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.

Meanwhile, the discount of the LME cash aluminium contract to three-month futures declined to a four-month low of $9.50 a ton, indicating tightening availability of LME inventories.

LME on-warrant aluminium stocks, those not earmarked for delivery, have slid by 60% over the past five months.

LME three month aluminium was up 0.1% at $2,184 a ton while zinc shed 0.3% to $2,429, lead was little changed at $2,101, nickel slipped 0.3% to $18,595 and tin fell 0.4% to $25,450.