LONDON - News of possible stimulus in China pushed copper prices up sharply on Thursday from the previous day's 20-month low, but many analysts expect further declines as rising interest rates stifle global economic growth.

Benchmark copper on the London Metal Exchange (LME) was up 4.6% at $7,865 a tonne in official trading after Bloomberg News reported that China, the biggest metals consumer, was considering $220 billion of stimulus measures.

Fueling gains were traders forced to buy back positions after they had ramped up bets on lower prices, analysts said. While the 4.6% rise is the biggest daily gain since September 2018, copper is still down nearly 3% on the week and nearly 30% from a March high of $10,845. On Wednesday prices touched $7,291.50, their lowest since November 2020.

"Copper is most exposed to an economic slowdown and prices could fall below $6,000 per tonne in the coming months in our base case," Bank of America analysts wrote in a research note. "If Europe runs out of gas, a risk, prices could decline to $4,500 per tonne."

MARKETS: Global shares rose but are still down about 20% this year.

INTEREST RATES: Central bankers are determined to raise rates to bring soaring inflation under control.

RECESSION: The head of the International Monetary Fund (IMF) said the economic outlook had "darkened significantly" and a possible global recession next year could not be ruled out.

FACTORIES: German industrial production rose less than expected in May, adding to a run of weak manufacturing data around the world.

DOLLAR: The dollar is near 20-year highs and expected to remain strong for at least the next three months, making dollar-priced metals costlier for non-U.S. buyers.

CITI: "A timely and decisive rollout of stimulus measures (over and above what has been announced) from China is required to support prices at current levels," Citi analysts said in a note. "Without it, prices will grind lower."

PRICES: LME aluminium rose 1% to $2,433 a tonne, zinc was up 3.6% at $3,104.50, nickel added 1.2% to $22,100, lead was 1.5% up at $1,999 and tin advanced by 1.2% to $25,005. Prices of all the metals except nickel are down sharply this year.

(Reporting by Peter Hobson, Additional reporting by Brijesh Patel in Bengaluru, Editing by David Goodman)