Copper earlier hit a session peak of $7,995 a tonne, the highest since October 23, helped by chart-based buying after it cracked its 200-day moving average of $7,905. Prices are on track to rise more than 2 percent in November, bringing total gains this year to around 5 percent. "The market is now beginning to appreciate that the worst is over in terms of the growth numbers in China and it does look like things there are beginning to show a slow and gradual improvement," said Gayle Berry, analyst at Barclays.
US consumer spending and income data fell short of expectations earlier, though business activity in the US Midwest expanded for the first time since August, data showed. Looking ahead, investors are likely to focus on purchasing managers' index (PMI) numbers from China due on Saturday for fresh indications of the pace of recovery in the country, which accounts for 40 percent of global copper demand. Economists polled by Reuters expect China's factory activity in November probably expanded at its fastest pace in seven months, reinforcing views that the country's economic recovery is entrenched.
Copper prices could stage a snap rally going into the end of the year, given low liquidity and supply constraints further out that make the metal one of the top commodities picks for 2013, said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm. "There's a couple of gazillion dollars on the sidelines waiting to park itself. What I worry about is that all of a sudden there will be a rush to the gates for big assets....I think now represents a good time to buy," he added.
The world's biggest copper producer, Codelco said in an interview that it saw encouraging signs of a recovery in China, adding that a pledge by China's new leadership to boost urbanisation would boost demand for the red metal. China's top maker of copper tubes, Golden Dragon Precise Copper Tube Group, expected 2013 production to rise by 14 percent from a year ago, as signs of an improving economy inspire cautious optimism, boosting orders at home and abroad.
Benchmark aluminium closed at $2,094 a tonne, up from a close of $2,063 on Thursday, having earlier hit its highest in nearly eight weeks at $2,094.25 a tonne. It was boosted by a lack of available supply and chart-based buying after it broke through its 200-day moving average of $2,024 on Thursday, traders said. Reflecting an absence of readily available stock, the premium for the December contract jumped to $20 against the January contract on Thursday from $3.75 at the start of the month.
Three-month zinc closed at $2,047 a tonne from Thursday's close of $2,027, also hitting a near eight-week high at $2,062, while benchmark lead closed at $2,252 a tonne from $2,222. Tin closed at $21,845 a tonne from $21,870, and nickel at $17,650 a tonne from $17,000.