BEIJING: Copper prices rose on Wednesday after better-than-expected manufacturing activity data from top consumer China underpinned demand hopes, although a firmer US dollar capped gains.

Three-month copper on the London Metal Exchange was up 0.8% at $9,032.50 a tonne, as of 0405 GMT, and the most-traded April copper contract on the Shanghai Futures Exchange advanced 1.7% to 69,870 yuan ($10,106.75) a tonne.

China’s manufacturing activity expanded at the fastest pace in more than a decade in February, an official index showed, smashing expectations as production zoomed after the lifting of COVID-19 restrictions late last year.

The world’s second-largest economy is expected to set its GDP growth rate target at 5.5%-6% this year at its annual parliament meeting that opens on March 5, Iris Pang, chief economist, Greater China at ING said in a note.

ING expects infrastructure investment to be the second major growth engine for China in 2023, after consumption.

Copper rebounds as investors take profits

Further gains in copper were capped by an uptick in the dollar as a higher-for-longer US rates scenario took centre stage, making the greenback-priced metal more expensive to buyers holding other currencies. Meanwhile, concerns about global supply eased.

The Panamanian government and Canada’s First Quantum are nearing an agreement on their negotiations over the contract to operate a major copper mine, Ebrahim Asvat, a lawyer advising the government on the negotiations told Reuters on Tuesday.

LME aluminium rose 0.6% to $2,387.50 a tonne, tin climbed 1.4% to $25,300, lead nudged up 0.1% to $2,105, and zinc advanced 2% to $3,059.50.

SHFE nickel fell 1.5% to 195,180 yuan a tonne, tin lost 1% to 207,590 yuan, while aluminium added 1.1% at 18,680 yuan and zinc climbed 1.4% to 23,455 yuan.