SINGAPORE, Jan 25 - Shanghai copper futures were one percent higher on Thursday, rising on supply concerns and strong economic growth in the world's largest copper consumer, China.
The most active April contract rose 560 yuan to 53,900 yuan ($6,936) a tonne by the midday break on Thursday.
"Consumers are buying after a period of absence. Demand is rising, but production appears to have slowed a little in the fourth quarter due to low fees for treating concentrates," a Shanghai trader said.
"Imports are up but are unable to meet the demand, which means futures are likely to rise, supported by a very strong physical market," he said.
Copper markets remain finely tuned to threats to supply, despite stocks doubling in LME warehouses to just under 200,000 tonnes over the past 12 months.
Traders said three smaller smelters in China's Shandong province had cut production by a combined 400 tonnes per day, due to high concentrate prices, while electricity supply problems had resulted in a slowdown at larger smelter.
Economic data out of China appeared to support strong demand for metals. China's gross domestic product grew by 10.7 percent in 2006, versus 10.4 percent in the previous year. [nPEK112699]
"The message is that the economy is booming and I'm forecasting that it will grow 10.7 percent again in 2007," said Tim Condon, Head of Asian Financial Market Research, ING in Singapore.
Other data from China showed the country produced 2.93 million tonnes of copper in 2006, up 17.8 percent from the previous year, while aluminium output was 19.7 percent higher.
China's refined copper imports in 2006 were down 32.3 percent at 827,021 tonnes amid historically high prices and sales by the State Reserves Bureau.
However imports surged by 59.4 percent in December to 95,831 tonnes from the previous year and imports in January are expected to be in excess of 100,000 tonnes. [nPEK103720]
Copper for delivery in three months on the London Metal Exchange was $55 higher at $5,770 a tonne at 0403 GMT.
"The market looks like it wants to go higher, but it needs to consolidate around here before any attempt to rally. The first target is $6,000 but there is lot of resistance between $5,900 and $6,000," a dealer in Singapore said.
Man Financial analyst Edward Meir said: "The close was a little mixed in London on Wednesday, but sentiment is positive."
"There are supply glitches across the market. Strike threats at Cerro Colorado in copper, the Sudbury nickel contract talks. In aluminium, the turmoil in Guinea, and tin has the smelter problems in Indonesia."
In Chile workers at the Cerro Colorado copper mine were likely to reject a recent contract offer from the owner, BHP Billiton .
The most traded April Shanghai aluminium futures contract slipped to 19,560 yuan from 19,670 yuan.
LME aluminium lost $2 to $2,802. Strikes and political unrest are cutting exports from the world's largest bauxite exporter, Guinea.
Premiums for LME cash metal were around $112 above the three-month price, close to their highest since 1990, and up from $30 at the start of 2007.
Dealers said business in Asia was thin, with investors more interested in trading spreads on the LME later in the day.
Nickel for delivery in three months on the LME was at $37,400 a tonne, up $200 from Wednesday, when the metal set a fresh record high of $38,500 as talks to settle a labour contract at Xstrata Plc's Sudbury operations in Ontario dragged..
Tin was down $75 at $12,150. Tin hit a record $12,500 on Wednesday.
Dozens of small smelters in Bangka in Indonesia stopped production in October after the police closed three for operating without proper mining permits.
Local police are also investigating tin miner PT Koba Tin in connection with sourcing illegal tin ore and operating outside its mining area.
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