Jan. 3 (Bloomberg) --Sterlite Industries (India) Ltd. (STLT), the nation's biggest copper producer, raised cathode prices for the second straight month, resisting a global decline, as the rupee weakened and optimism grew demand will revive.

The company increased prices by 0.6 percent to 431,199 rupees ($8,101) a metric ton effective Jan. 1, it said today on its website. Copper fell 3.6 percent last month on the benchmark London Metal Exchange, while the Indian rupee fell 1.6 percent against the dollar.

Copper demand may climb as government power and construction projects are revived in the last quarter to meet deadlines for the financial year ending March 31. The rise in manufacturing indexes in China and India and an increase in confidence among U.S. consumers last month are likely to boost sales of metals, including copper.

"The demand is alright so far and Sterlite should be able to sell whatever it produces," said Bhavesh Chauhan, an analyst at Angel Broking Ltd. in Mumbai. "The falling rupee has boosted the landed cost of copper and that probably prompted a price increase."

Tuticorin, Tamil Nadu-based Sterlite rose as much as 4.1 percent, the most in a month, to 93.95 rupees and traded at 93.55 rupees as of 1:25 p.m. in Mumbai. The benchmark Sensitive Index jumped 2.2 percent.

Copper averaged $7,578.40 a ton in December on the LME, 0.3 percent lower than the previous month. Chinese and Indian manufacturing gauges rose in December, suggesting that Asia's fastest-growing major economies are withstanding the fallout of Europe's sovereign-debt crisis.

The unit of Vedanta Resources Plc (VED), which sets prices each month based on the average LME price the previous month, had cut prices by 9.5 percent in November.