Copper climbed on Tuesday to the highest level in over a week after data on Chinese economic growth soothed worries about a potential hard landing in the world's biggest metals consumer. Chinese GDP grew 6.8 percent in the fourth quarter, sparking short-covering by some investors who had bet on a weaker number. The figure for the year as a whole was 6.9 percent.
Chinese stocks markets also rallied despite the slowdown in growth, helped by prospects that Beijing would unleash more stimulus measures to support its economy. "There were some very low GDP forecasts out there, some in the low 6s, so if you've gone short on that basis then clearly you're going to be covering very quickly," said Wiktor Bielski, head of commodities research at VTB Capital in London.
Three-month copper on the London Metal Exchange hit its highest since January 8 at $4,476 a tonne, before cutting gains to end at $4,407, up 0.7 percent. Prices hit lows of $4,318 on Friday, the weakest since 2009. Flagging headwinds for metals demand, growth of investment in China's property sector declined in December to slowest in nearly seven years. Meanwhile, China's electric power generation fell for the first time in nearly five decades last year.
"It remains to be seen whether the modest uptick will fizzle. We are still not seeing (the) aggressive supply side cuts needed in order to better rebalance the markets," said INTL FCStone analyst Ed Meir. An Indonesian minister rejected the price Freeport McMoRan is asking the government to pay for a stake in its Indonesian unit, dealing a potential blow to already fragile talks over the firm's future, including its plans to expand one of the world's largest copper mines.
Aluminium closed up 0.1 percent to $1,481 after touching a two-week high of $1,509, but Nicholas Snowdon at Standard Chartered warned aluminium's rally was likely to soon end. Nickel ended down 0.1 percent at $8,580, having hit the strongest since early January. The global nickel market recorded a 53,200-tonne surplus for the first 11 months of 2015, around half the surplus seen in the same period in 2014. Lead closed up 1.6 percent at $1,632, zinc ended up 0.8 percent at $1,507.50 and tin closed down 0.2 percent at $13,300.