Copper prices rose as better than expected economic data from China suggested the world’s largest importer of the industrial metal may be seeing its economy stabilise after a rocky start to the year.

Copper for July delivery, the most actively traded contract, settled up 1.5 per cent, or 4.70 cents, at $US3.1705 per pound on the Comex division of the New York Mercantile Exchange.

China’s purchasing managers index – a gauge of country-wide factory activity – rose to 50.8 in May, the highest reading this year and above a median forecast for 50.6 by eight economists surveyed by The Wall Street Journal.

A reading above 50 indicates expansion from the previous month, while a measure below it indicates contraction.

Later in the day, a report from the Institute of Supply Management showed manufacturing activity in the US last month grew in line with expectations.

The data are good news for copper, which is used in a wide variety of manufacturing activity and is, therefore, sensitive to fluctuations in the economy.

China is the largest consumer of copper, followed by the US.