Copper prices rise on China demand

London copper rose today as an expansion in China's manufacturing boosted hopes that demand for industrial metals will increase, but investors remained cautious as Europe's debt crisis persists.

The metal posted its first annual decline in three years in 2011 when it lost a fifth of its value on fears related to the euro zone debt crisis and the global economic slowdown.

"China's PMI number looks positive, better than most people had expected earlier on," said Huang Yiping, chief economist for emerging Asia at Barclays Capital in Hong Kong.

"But caution remains in the market. The euro zone economy is declining, it's in negative growth."

The euro zone accounts for than 20 per cent of China's export market, Huang said.

Three-month copper on the London Metal Exchange climbed 1.3 per cent to $7,699 (£4,937.79) a tonne, extending gains from the last trading session on December.

The Shanghai Futures Exchange is closed for a holiday.