(Bloomberg) -- Copper traded near a six-year high as investors weighed U.S. jobless data and the long-term effects of the pandemic against continued demand out of top consumer China.The U.S. saw applications for state jobless benefits unexpectedly rise in the first back-to-back increase since July, according to a report Wednesday, indicating that surging cases and increased restrictions are fueling a new wave of layoffs. A dimming U.S. economic outlook and surge in coronavirus infections worldwide indicate progress on vaccines may not be enough to offset economic repercussions of the ongoing pandemic.Some see a pullback in prices of the industrial metal even as strong demand from China put the market on track for a deficit. Copper inventories have tumbled to the lowest since 2014 and the Asian nation’s consumption is defying its typical winter weakness as manufacturers slow activities.“Copper has been overbought for several days now,” ED&F Man Capital analyst Edward Meir said in a phone interview. “It’s been due for a pullback because there’s nothing really new in the market to drive it further. I’m not sure how much higher we can go and we expect there will be some rollback in prices as U.S. growth stalls.”A wave of bullish factors propelled copper about 60% higher from this year’s low in March, with a weaker dollar and recent promising vaccine developments setting prices up for an eighth monthly gain, its longest rally since 2011.Industrial metals are poised to benefit from China’s recovery in the coming year, according to analysts at Citigroup.“We expect the economic recovery in 2021 to benefit metals demand,” Citigroup analyst Ephrem Ravi said in an emailed note. “We expect late-cycle metals prices should outperform as improving demand meets with already high utilization and low inventory.”With the outlook for growth brightening, copper has the strongest fundamental footing among base metals, with prices likely to top $8,000 a ton next year, according to Bank of America Merrill Lynch.Prices hit a six-year high of $7,360 a ton in early trading on the London Metal Exchange before slipping to $7,301.50 at 4:47 p.m. in London.“The metal is consolidating,” StoneX analyst Michael Cuoco says over the phone. “This is what traders want to see. Copper is building a foundation above $7,000 which will allow the metal to go on to new highs.”The metal’s key role in the renewable energy transition is likely to fuel increasing consumption, with Jefferies LLC warning of “unmanageable” global deficits in coming years.The formal start of President-elect Joe Biden’s transition has reduced political uncertainty, and positive vaccine news is driving optimism that global growth will recover from this year’s pandemic-driven hit. Biden’s pledges to boost spending on copper-heavy renewable energy and electric-vehicle infrastructure have bolstered sentiment further.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.