US copper futures charged to a two-week high in early trade on Thursday after strong Chinese economic data raised expectations of increased demand growth from the world's largest consumer of the red metal, analysts said.
"Very, very good numbers. The economy continues to move ahead, actually quite strongly, in China, which is not a surprise," said Patricia Mohr, vice-president and commodity market specialist with Canada's Scotiabank Group.
Copper for March delivery rallied 5.30 cents, or 2 percent, at $2.6554 a lb by 10:23 am EST (1523 GMT) on the New York Mercantile Exchange's COMEX division, ranging between $2.5965 and $2.6815, its priciest since January 11.
Spot January advanced 5.65 cents at $2.6450. Futures volume by 9:00 am reached 1,000 lots. China's economy expanded by 10.7 percent in 2006, its fastest rate in more than a decade, as investments and exports powered ahead despite government attempts to keep the breakneck pace of growth in check.
Other data from China showed the country produced 17.8 percent more refined copper in 2006 to 2.93 million tonnes, while apparent consumption of refined copper rose 15.4 percent to 3.54 million tonnes.
"Last year, China's copper imports actually did not perform very well, but you can see from the underlying consumption that consumption was rising much more strongly than the imports would have suggested," Mohr said. "What that means is that the stocks inside China of copper are probably quite low and they will need to have to step up imports this year, which should buoy copper."
China's refined copper imports rose 59.4 percent on the year to 95,831 tonnes in December, as a tightening spot market lifted premiums and attracted shipments. On Wednesday, warnings of dwindling copper stockpiles from China's leading copper producer, Jiangxi, boosted global copper prices.
"Copper stocks have been reported tight in Shanghai. Similar to gold, we're hearing that there is a possible adding of mineral reserves in China, and that seems to be underpinning the market," said James Quinn, commodity commentator with A.G. Edwards. Jiangxi, which has an annual output of around 440,000 tonnes, said planned maintenance was likely to have an impact on production.
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