LONDON: Copper climbed on Wednesday on indications of higher demand for the metal, though gains were capped by rising inventories and as the dollar firmed ahead of a US Federal Reserve statement.

Three-month copper on the London Metal Exchange (LME) rose 0.7% to $9,024.50 per tonne in official trading, having touched a 9-1/2 year peak of $9,617 last month.

"We are still in a long term constructive environment for copper. Generally commodities are in a bull market given some of structural changes in terms of demand for energy metals," said WisdomTree analyst Nitesh Shah.

Data from top metals consumer China showed stronger-than-expected industrial growth in the first two months of 2021, while new lending in the country fell less than expected in February.

US FED: Investors were cautious as the US central bank ends a closely anticipated two-day meeting on Wednesday, after a sharp rise in US Treasury yields this year on expectations for stronger growth and inflation.

The dollar gained ahead of the expected Fed statement .

INVENTORIES: Capping price gains were more inflows into warehouses registered with the LME. Total stocks have jumped 44% in the last two weeks to 107,275 tonnes.

SPREADS: The premium of the LME cash copper contract over the three-month contract has eased to about $4 a tonne compared with $62.30 on Feb. 26, which was its highest in two years.

SUPPLY: China's refined copper output in the first two months of 2021 rose 12.3% year-on-year to 1.63 million tonnes, data released by the National Bureau of Statistics showed.

For the first 11 months of 2020, the 24 million tonne global refined copper market was in a 589,000 tonnes deficit compared with a 427,000 tonnes deficit in the same period a year earlier, the International Copper Study Group said.

OTHER METALS: LME aluminium rose 1.3% to $2,235 a tonne, zinc climbed 0.5% to $2,824.50, lead added 0.5% to $1,944.50, tin gained 3.3% to $25,820, and nickel declined 0.6% to $16,047.