NEW YORK—Copper futures leaped to a seven-week high as traders cheered better-than-expected industrial-production data from top copper consumer China.
The most actively traded contract, for March delivery, rose 5.10 cents, or 1.4%, to trade at $3.7140 a pound on the Comex division of the New York Mercantile Exchange.
China posted its highest industrial production numbers since March, with output up 10.1% in November from a year earlier, beating forecasts of a 9.8% increase. The November data also improved on October's 9.6% increase.
The stronger data pushed copper prices to $3.7175 a pound, their highest level since Oct. 19.
The report reinforced "our view of a decent rebound in growth" in the fourth quarter, said traders at RBC Capital Markets in a note to clients.
Investors have worried that China, which accounts for about 40% of global copper demand, would reduce its presence in the copper market if its economic growth and manufacturing activity continued to slow. Copper is widely used in industrial applications because it easily conducts electricity and doesn't rust when exposed to water.
China's consumer price index, a measure of inflation, rose 2% in November, up from 1.7% in October—its slowest rate of inflation in three years.
This made some market participants optimistic that Chinese authorities will soon announce an economic stimulus package that will lift the pace of business activity.
"Since inflation saw only moderate growth, the Chinese government and the country's central bank still have further scope to undertake expansionary measures, which are likely to boost the economy," analysts at Commerzbank CBK.XE -2.50% said in a note to clients.
Copper prices also drew support from the weaker dollar, which retreated against the euro. Copper is traded in dollars and becomes less expensive for investors who use other currencies when the dollar eases.
