(Bloomberg) -- Copper advanced to the highest level in almost four months after comments by Federal Reserve Chair Jerome Powell and the looming shutdown of a large mine in Panama emboldened bulls.

The metal rose as much as 2% on Friday, supported by an unexpected pickup in Chinese manufacturing activity. It extended gains following a speech by Powell, who reinforced expectations for monetary loosening to come early next year.

US rate hikes have been a major headwind for metals this year, weighing on key consumers like construction firms and manufacturers while undercutting investor demand for the commodities. Copper climbed 4.4% in November, the first monthly increase since July.

The turnaround for copper comes just as the supply is set to be squeezed by Panama’s plans to shut down First Quantum Minerals Ltd.’s Cobre operation, which produces about 1.5% of the world’s supply. The mine, which has been the target of mass protests from environmentalists and labor unions, already suspended output last month after a blockade of boats restricted key supplies.

The gap between the demand and supply of copper ore is set to widen next year, according to BloombergNEF. Two key producing regions — Chile and Peru — are facing bottlenecks in increasing output, while demand is rising in China, it said. Copper prices are likely to remain elevated, it added. 

Copper rose 1.7% to $8,610.50 a ton on the London Metal Exchange by 5:46 p.m. local time. Most metals were higher, with tin adding 2.6% and zinc 2.2%. Lead was little changed. 

Shares in mining firms also rallied on Friday, benefiting from analyst upgrades to Anglo American Plc, Antofagasta Plc and Rio Tinto Plc.

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