LONDON - Copper prices rose on Tuesday as a weaker dollar reinforced hopes for stronger demand after top consumer China relaxed its COVID-19 quarantine rules, though gains were capped by concerns over the global economy.

Benchmark copper on the London Metal Exchange (LME) traded up 1% at $8,500 a tonne in official rings. Prices of the metal viewed by investors as a gauge of economic health had touched $8,122.50 on Friday, the lowest since February 2021.

"China's hard lockdowns have hit manufacturing activity and industrial metals demand," said Julius Baer analyst Carsten Menke. "Markets fear economies can't cope with this mix of high inflation and tightening monetary policy."

COVID: China will halve to seven days its COVID-19 quarantine period for overseas visitors, with a further three days spent at home. The country's state planner also boosted sentiment by saying it would roll out tools in its policy reserve in a timely way to cope with economic challenges. Clues to Chinese demand for industrial metals will come later this week from surveys of purchasing managers in the manufacturing sector.

DOLLAR: A weaker U.S. currency makes dollar-priced metals cheaper for holders of other currencies, which tends to boost demand. This relationship is used by funds to generate buy and sell signals from numerical models.

GROWTH: Rising inflation and interest rates have fuelled worries about a global economic recession.

SPREADS: Concerns over low zinc stocks in LME-registered warehouses have eased. This can be seen in the narrowing premium for cash metal over the three-month zinc contract , last at $66 a tonne compared with more than $200 last week. But zinc availability on the LME remains a problem as cancelled warrants — material earmarked for delivery — at 77% of the total indicate that more metal is due to leave LME warehouses over coming weeks. Three-month zinc rose 1.7% to $3,376 a tonne.

OTHER METALS: Aluminium was up 1% at $2,519.5, lead was down 0.5% at $1,994, tin gained 2.4% to $27,650 and nickel jumped 4.5% to $23,915.

(Reporting by Pratima Desai, Additional reporting by Brijesh Patel in Bengaluru, Editing by Vinay Dwivedi and David Goodman)