Bloomberg reported that copper neared 4 month high in New York as stronger than estimated economic growth in China bolstered demand prospects and Rio Tinto Group said its production of the metal fell, underlining threats to supply.

China’s national statistics bureau said that gross domestic product expanded 8.9% in the Q4, above the 8.7% median estimate in a Bloomberg News survey of economists.

Rio Tinto said that the country is the biggest global copper consumer. Output of mined copper slid 23% in 2011, speeding up from the 16% decline a year earlier.

Goldman Sachs Group Inc said that London Metal Exchange stockpiles at 13 month low are adding to signs that demand is improving. Prices are set to climb to USD 9,000 per tonne in the middle of the year as destocking ends in Europe, tightening the market and Chinese demand accelerates.

Morgan Stanley analysts including Mr Peter Richardson in Melbourne said that “We remain positive on copper as we expect reduced inventories, supply disruptions and a restocking cycle in China to deliver another year of deficits and strong prices.”

Industrial production in China climbed 12.8% from a year earlier in December, exceeding a forecast of 12.3%. GDP still expanded at the slowest pace in 10 quarters as Europe’s debt crisis curbed export demand and the property market weakened, sustaining pressure on Premier Wen Jiabao to ease monetary policy.

Rio said that lower ore grades at Escondida in Chile, the world’s biggest copper mine and Kennecott in the US contributed to the drop.

According to Morgan Stanley said that demand for refined copper is set to exceed supply by 300,000 tonnes this year, the third straight annual shortfall.

Mr Duncan Hobbs an analyst at Macquarie in London said that “We will probably see some disruptions. The underlying fundamental market balance still looks tight. China still looks strong.”

(Sourced from Bloomberg.net)