But the move lacked conviction as volumes continued to run thin, leaving copper prices vulnerable to another downside correction as fears of European debt contagion overshadowed the red metal's bullish backing. "While you've gotten some really decent industrial-related headlines, everybody is looking across the pond at Europe," said Sean McGillivray, vice president and head of asset allocation for Great Pacific Wealth Management in Oregon. "That news flow takes down every risk asset, and I think copper is the No. 1 risk asset people are willing to sell." London Metal Exchange (LME) three-month copper futures rose $50 to close at $7,730 a tonne. In New York, copper values failed to match London's gains. The key December COMEX contract fell 1.70 cents to settle at $3.4845 per lb, after dealing between $3.43 and $3.5380. Volumes, at around 45,500 lots in late New York trade, remained more than 20 percent below the 30-day norm, according to preliminary Thomson Reuters data. "Everyone is watching Italian sovereign yields. For now nobody is going to be buying (metals) and people will most likely wait until the macro situation becomes clearer," Andrey Kryuchenkov, an analyst at VTB Capital, said. Contagion from the weakest debt-ridden euro zone economies such as Greece into bigger ones such as Italy, Spain and even France is now the dominant fear for global investors. Italian 10-year government bond yields crept back up above 7 percent while French borrowing costs rose and were expected to remain under pressure as European Central Bank intervention to calm the market failed to assuage fears the debt crisis was spreading to the euro zone's second-biggest economy. STRIKE IN FOCUS Lending fragile support to copper prices was news that striking union workers at Freeport Indonesia's giant Grasberg copper mine were sticking to pay demands for $7.50 an hour -- a wage request deemed "excessive" by the company's chief executive. Speaking at Dahlman Rose & Co's Second Annual Global Metals, Mining & Materials Conference in New York, Richard Adkerson, Freeport-McMoRan Copper & Gold Inc's CEO, said his company was firmly committed to working in good faith with the union, but added that the wage demands of the union "have been excessive by an extraordinary amount". "We are proposing a very generous increase of 35 percent over two years, but they are asking for multiples of that," Adkerson said. "It's hard to understand where the numbers are coming from." Miners at Grasberg have been on strike since mid-September, leading Freeport to declare a force majeure on concentrate shipments last month. A double-dose of US data also offered some support. Consumer prices fell in October for the first time in four months and growth in industrial output came in at a better-than-expected 0.7 percent -- signs that the world's largest economy was gaining traction. The global copper market had a surplus of 236,800 tonnes in January to September, compared with a surplus of 18,200 tonnes in the whole of last year, the World Bureau of Metal Statistics (WBMS) said on Wednesday. A Europe-based trader said the market for copper concentrates had tightened, with Chilean producers offering tenders for material at $20 per tonne or two cents a lb treatment and refining charge . TC/RCs are fees paid by miners to smelters and refiners to process material. Japan's top copper smelter, Pan Pacific Copper Co, said as recently as June it was aiming for a rise of at least 10 percent in mid-year copper treatment and refining fees from June-December fees to reflect ample concentrate and slowing demand. Zinc ended up $52 at $1,960 a tonne, after workers and Peruvian zinc miner Volcan reached a wage deal on Tuesday.