OREANDA-NEWS. February 05, 2015.Copper prices rose to a two-week high on Wednesday after top consumer China's central bank moved to add more liquidity to the economy, raising optimism about the outlook for growth.

China's central bank cut the amount of cash that banks must hold as reserves, the first industry-wide cut since May 2012, to help boost bank lending and combat a growth slowdown.

"This will give hope to the market that there is some stimulus on the way and that China is reacting to the weaker economic data by stimulating growth," said Gayle Berry, metals strategist at Jefferies.

"It will give temporary support to the market. Whether or not that continues will depend on whether people believe it will be enough to filter into the wider economy."

Three-month copper on the London Metal Exchange (LME) rose 0.7 percent to \\$5,727 a tonne at 1122 GMT, having earlier hit a session high of \\$5,755 a tonne - its highest since January 22. Copper posted its biggest one-day gain in 1-1/2 years on Tuesday.

Copper was pressured earlier in the session by data showing the services sector in top consumer China grew at the slowest pace in six months in January as growth in new business weakened, a private survey showed.

The metal used in power and construction is still down 9 percent so far this year, having touched a 5-1/2 year low of \\$5,339.50 last week.

Copper prices remain vulnerable to signs of rising supplies. LME copper stocks rose by 1,850 tonnes on Wednesday, and have risen by more than a third this year.

Also weighing on sentiment in the commodity markets was a drop in oil prices following a four-day rally, as well as a rise in the dollar against a basket of currencies. A strong dollar makes commodities priced in the U.S. unit more expensive for holders of other currencies.

Pan Pacific Copper (PPC), Japan's biggest smelter, said on Wednesday it would not be taking term deliveries of copper concentrate from BHP Billiton in 2015 after the two failed to agree on processing fees.

Chinese copper producers are cutting demand for raw material scrap due to low margins at a time of weak metal prices, which could slow down growth in China's production of refined copper this year, industry sources said.