Feb 09, 2012 NEW YORK (Dow Jones)--Copper futures pushed to their highest price since mid-September on Thursday, as investors bet stability in Europe's banking system and continued growth in China pointed to strong demand for the industrial metal.

The most-actively traded copper contract, for March delivery, rose 6.9 cents, or 1.8%, to settle at $3.9785 a pound on the Comex division of the New York Mercantile Exchange, the highest settlement price since Sept. 13.

Copper's gains Thursday came after news that Greece's political leaders came to an agreement on a new set of budget-cutting measures necessary to secure another bailout deal for the debt-laden country. Adding fuel to the rally were mostly upbeat comments on the currency union's fight to keep its debt crisis from worsening by European Central Bank President Mario Draghi.

Copper is sensitive to the economic outlook because of the metal's widespread uses in construction and manufacturing. Worries about a slowdown in demand from the euro zone and top metals consumer China helped send the metal to a 23% decline in 2011, but improved growth prospects in recent weeks have drawn buyers back to the market.

Through Thursday's close, futures were up 16% in 2012.

"Many people had sold this market down in anticipation of some further contraction of the global economy," said Stephen Platt, a futures strategist with Archer Financial Services. "That's not happening."

Copper futures also gained Wednesday after China's central bank signaled support for the country's ambitious housing plan, a development seen increasing the country's appetite for copper in wiring and plumbing.

But a bearish turn in China's recent streak of upbeat economic data gave some copper traders pause Thursday. The rate of inflation in the country accelerated in January, missing market expectations for the rate to hold steady.

Beijing has limited the availability of cash in the country's financial system in an effort to clamp down on rising prices. Easing inflation in recent months had raised hopes that leaders there may ease monetary policy and allow factories more flexibility to finance copper purchases.

"This news could put a damper on Chinese authorities' desire to ease monetary policy," traders with RBC Capital Markets said in a note. Metals prices "have obviously become unsettled by this as easing by China had been priced into the market during January."

Some traders were looking ahead to China's official January trade data, scheduled for release Friday. The country imported a record amount of copper in December, and many market watchers expect imports to have slowed in January.

Copper settlements (ranges include electronic and pit trading):
Mar $3.9785; up 6.90 cents; Range $3.8730-$3.9895
May $3.9840; up 6.60 cents; Range $3.8815-$3.9950