LONDON: Copper rose on Monday as sentiment towards risky assets picked up in the wider markets, and as investors awaited data on US home sales, though gains were capped by concern over lacklustre demand growth in top consumer China.
Three-month copper on the London Metal Exchange traded up 0.78 percent at $8,445 a tonne in official midday rings, from $8,380 a tonne at the close on Friday, when the metal closed the week down 1.5 percent.
"The market is just waiting for the next trigger. There's probably more bullish (factors) than bearish but we're very much range trading," said Standard Chartered analyst Dan Smith.
"China is a major obstacle, corporates and traders there are still pretty downbeat, there's a lot of metal sitting in bonded and exchange warehouses... (but) the US is outperforming on many measures."
US stock index futures were up as investors looked to February pending home sales, while European shares were higher after a key German business climate index rose unexpectedly in March.
Copper has gained about 10 percent this year, spurred by improved economic data from the US, the world's largest economy, ultra-loose monetary policy in the western world and as action was taken to stem Europe's debt crisis.
But an unexpected drag on the metal's price prospects has been China, which consumes more than 40 percent of the world's copper.
Data out overnight showed copper stocks in warehouses monitored by the Shanghai Futures Exchange fell 1.6 percent on the week, though they remained near their highest in almost a decade.
In the western world though, LME stocks continue to fall, with the latest data showing them down 1,175 tonnes at 255,175 tonnes, their lowest since November 2008, and equivalent to just 4.5 days of global demand.
CAUTIOUS
"We are cautious on prices in the very short term, with the loss of Chinese apparent demand at about $8,400 per tonne unlikely to be totally offset by the improvement coming from ex-China," said Macquarie in a note.
"That said the downside risk is not too severe. Ex-Chinese copper usage is likely to have improved since December and leading indicators suggest they will continue to improve in the next three-six months."
Elsewhere, investors await a slew of US data this week, including home sales, GDP and durable goods numbers, for further clues on the outlook for metals demand in the world's largest economy.
Data out last week showed money managers of US copper futures increased their long positions or bets on price rises for a second week by March 20.
"There are always going to be some shakes up and down, (but) we're seeing equity markets improve, and people more comfortable taking exposure to risky assets like metals," said Matt Fusarelli, analyst at Australia-based consultancy AME Group.
In other metals traded, lead fell 0.30 percent to trade at $1,979 a tonne in rings from $1,995, though falls were limited by indications that Chinese demand for the metal was picking up.
China's consumption of refined lead has risen this month, industry sources told Reuters last week, because of higher output of lead-acid batteries, manufacturers of which are the country's top users of the metal.
Soldering metal tin dipped 0.56 percent to trade at $22,350 a tonne in rings from $22,225, zinc traded flat at $2,005, aluminium rose 0.5 percent to trade at $2,168 from $2,174, while stainless-steel ingredient nickel gained 0.14 percent to $18,200 from $18,175.