LONDON: Copper prices rose on Thursday, bolstered by upbeat data in the US, the world's largest economy, but concerns about the outlook for demand from top consumer China weighed on sentiment and limited gains.
Benchmark copper on the London Metal Exchange (LME) traded up 0.71 percent at $8,520 a tonne at 1450 GMT, after closing at $8,460 on Wednesday.
Prices for the metal used in power and construction have seesawed between around $8,400 and $8,600 this week as investors weigh an overall improved outlook for global growth against disappointing copper demand in China.
US data on Thursday showed jobless claims back at a four-year lows last week, a modest pick-up in the pace of manufacturing in New York in March. The data follows a modestly improved outlook from the US Federal Reserve earlier this week.
"The US is no longer the center of gravity in the (copper) market, but if the US is recovering it gives you an awful lot of positive investor sentiment," said Natixis analyst Nic Brown.
But he added: "While we're confident there is a move towards pro-growth policies in the developing world, China is the laggard and we still wait for a clear cut shift in the overall policy stance."
Premier Wen Jiabao said on Wednesday China must embrace slower growth and bolder political reform to keep its economy from faltering, denting hopes for a swift recovery in demand from China, which consumes about 40 percent of the world's copper.
Wen also dampened hopes for any near-term easing measures in the country's property sector.
"The demand this year is not looking particularly good, as the cycle of rapid economic growth driven by fixed asset investment is over and export-driven growth is also easing," said Zhu Bin, an analyst at Nanhua Futures in the eastern Chinese city of Hangzhou.
Copper has risen around 11 percent so far this year, after a 21 percent slide in 2011, on a brightening economic outlook in the United States and hopes that easy monetary policies around the world would buoy asset prices. The uptrend has stalled over the past two weeks, however.
FALLING LME STOCKS
LME copper stocks fell by 2,875 tonnes to 267,750 tonnes, the lowest level since July 2009. The ratio of cancelled warrants - material earmarked for delivery - to the total stocks was 33.47 percent.
Large amounts of copper have been moving from LME warehouses to China over the past few months, pushing Shanghai copper stocks to their highest in a decade, overshadowing a sluggish rebound in copper demand after the Lunar New Year holiday.
Analysts said some Chinese companies were using part of the copper inflow as collateral to obtain credit, or selling for cash to finance other investments, while real consumption remains sluggish.
"Chinese corporations are surprisingly cautious on China right now," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
But he added: "Beijing has enough ammunition both on the fiscal and monetary side to shore up the markets when they need to, and we expect they will. They will be there to offer support to keep growth at a healthy 8.1 percent this year."
In industry news, Freeport-McMoRan Copper & Gold Inc lowered its copper and gold sales outlook for the first quarter and said its strike-hit Grasberg mine in Indonesia will not be back to full production until the second quarter of this year.
Zinc traded up 0.75 percent at $2,089.50 a tonne from a close of $2,074, while lead was up 1.15 percent at $2,126.25 a tonne from $2,012. Nickel was down 1.57 percent at $19,268 a tonne from a close of $19,575.
Aluminium was up 0.54 percent at $2,241 from Wednesday's close of $2,229. Tin was down 0.23 percent at $23,745 a tonne from $23,800.
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