SINGAPORE: London copper steadied on Wednesday around two-week lows hit in the previous session as a pick-up in US consumer spending bolstered risk appetite, while prospects for renewed growth momentum from top metals buyer China also underpinned prices.
US retail sales gained solidly in December as Americans shrugged off the threat of higher taxes and bought automobiles and a range of other goods, suggesting momentum in consumer spending as the year ended.
Reflecting improved appetite for risk, Asian shares also inched higher as investors awaited more clues on global growth, with US industrial production figures out later and China's gross domestic product data due on Friday.
"It looks as though there has been some stronger data from China and we're flagging upside risk to our forecasts. It might be that people are just holding out for confirmation," said Alexandra Knight, an economist with National Australia Bank in Melbourne.
"We might see prices a bit elevated in Q1 this year. But for now it sounds reasonable that things remain quiet until after February when the US will resolve the debt ceiling and after the Lunar New Year," she added.
Three-month copper on the London Metal Exchange was trading at $8,010 a tonne by 0318 GMT, up 0.2 percent from the previous day when it hit two-week lows for a second session running at $7,940 a tonne.
Upward momentum has fizzled out since copper rose to about$8,250 a tonne, its highest in more than two months, early this year, with buyers from China reluctant to chase prices until after the Lunar New Year holiday in early February, traders said.
The most-traded April copper contract on the Shanghai Futures Exchange rose 0.54 percent to 58,010 yuan ($9,300) a tonne.
China's annual economic growth may have quickened to 7.8 percent in the fourth quarter a Reuters poll showed, snapping seven straight quarters of weaker expansion, but the recovery is likely to be tepid and the economy may need continued policy support.
From the United States, two dovish Federal Reserve officials pushed back against some of their more hawkish peers on Tuesday, arguing that the US central bank's accommodative policies are appropriate and may even need to be eased further.
"We expect copper to be amongst the better performers in the base metals space in 2013," said ANZ in a research note.
"Our expectations for a recovery in China and improving sentiment in the US will underpin stronger demand and push prices to $9,000/t by year end."
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