Shanghai Futures Exchange copper was finished up 0.5 percent at 35,190 yuan ($5,350) on Friday. China's copper premiums rose to $95-$100 this week, the highest since late October. Hopes for more policy stimulus in Europe and also Japan offered a much-needed but tenuous reprieve to base metals, oil and global equities on Friday.
Also supporting copper prices has been a pick-up in the purchase of copper shipments, as smelters stockpile ahead of next month's Lunar New Year. But the impact is not expected to last. "Demand is going to shrink from late January due to the Lunar New Year, that's why we will see a lower price in the first quarter," said analyst Chunlan Li of CRU in Beijing.
However, demand and prices are expected to revive into the seasonally strongest second quarter as China's overall consumption grows this year, she said. CRU sees growth in China's copper demand climbing to 2.8 percent this year from 2.3 percent in 2015. Average cash prices are forecast at $4,376 a tonne for the first quarter, climbing to average at $4,603 for the year.
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