LONDON--Copper prices rallied in London on Tuesday, as further evidence of China's slowing economy stoked hopes for government stimulus in the Asian giant.
The London Metal Exchange's three-month copper contract was up 1.6% at $4,447.50 a metric ton in noontime European trade, reaching a one-week high earlier in the session at $4,476 a ton.
The gains came as markets rallied across the board on Monday, with Asian and European shares lifting off recent lows and oil moving past $30 a barrel again.
Copper has fallen almost $150 a ton in value since the first trading session of the year, mainly as a result of weak sentiment surrounding the health of China's economy. The country accounts for roughly 45% of global copper demand.
On Tuesday, the Chinese government revealed its economy grew at 6.9% in 2015, compared with 7.3% in 2014, with its real gross domestic product growth dipping to 6.8% year-over-year in the fourth quarter from 6.9% in the third quarter.
Some analysts expect that the metal could see a further boost as traders who have gone short cover their positions. Most analysts believe that the selling in copper isn't justified by the fundamental supply and demand picture.
"The metals are oversold in our opinion and therefore there is risk of short-covering, but how far the rebounds go before running into more selling remains to be seen," William Adams, head of research at Fastmarkets, wrote in a note to investors.
Among the other base metals, aluminum was up 0.7% at $1,491 a ton, zinc was up 1.7% at $1,521 a ton, nickel was up 1.1% at $8,685 a ton, lead was up 1.1% at $1,623 a ton and tin was down 0.4% at $13,270 a ton.
