* Equities positive after U.S. GDP exceeds forecasts
* Weaker U.S. dollar supports upside post-data
* Surprise fall in copper stocks
(Recasts, adds official prices/comments/details)
By Michael Taylor
LONDON, Oct 29 (Reuters) - Copper extended gains from one-week lows on Thursday as above-forecast U.S growth figures signalled better metals demand prospects and dented the dollar.
Copper for three-month delivery MCU3 on the London Metal Exchange traded at $6,455 a tonne in rings from $6,430 at the close on Wednesday. The metal, used in power and construction, earlier hit a one week low at $6,405.
The U.S. economy grew in the third quarter for the first time in a year as consumer spending and investment in new home-building rebounded, data showed, unofficially ending the worst recession in 70 years. [ID:nN28314202]
"There have been some doubts about whether recovery is truly underway," said Danske Bank analyst Christin Tuxen. "But at least now ... we have a positive surprise which suggests the road to recovery will be less bumpy."
On Wednesday, many industrial metals hit multi-week lows on weak housing data and a stronger dollar.
Adding pressure to base metals, equity markets have fallen in recent sessions, as investors worry about the outlook for global economic recovery after months of gains. [MKTS/GLOB]
"Equity markets are determining short-term trading direction," said John Meyer, analyst at investment bank Fairfax. "It introduces cautiousness into the market, with copper at high price levels it is easy for traders to give it some negative direction."
European shares turned positive after the U.S. data, while U.S. stock index futures jumped on the improving economic outlook. [.EU] [.N]
Currencies have also played a major role is rising commodity prices this year, with a weaker U.S. unit making metals priced in dollars less expensive for holders of other currencies. [USD/]
Some analysts said next week's ISM manufacturing data would be important in determining the outlook for metals demand, more so than historical GDP data.
"The reason the market reacted as it did was because it was oversold in the short term. GDP is backward looking, it doesn't change the outlook for metals demand, for that you have to look at other data," said Jesper Dannesboe, senior commodity strategist at Societe Generale.
"If you want to see real action you have to look at forward looking data like the ISM on Monday."
INVENTORIES SLIP
Helping sentiment, LME copper inventories bucked the recent trend by falling slightly, although worries over demand outside China remained. Inventories of copper at LME warehouses shed 325 tonnes to remain near five-month highs at 371,400 tonnes.
Aluminium MAL3 traded at $1,937 in LME rings versus $1,912. LME stocks for the metal, used in transport and packaging, lost 5,450 tonnes to 4.56 million tonnes.
Also supporting prices, Japanese industrial output rose for the seventh month running in September, as global stimulus measures led car and electronics makers to increase production. [ID:nT303012] Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz), the world's No.2 steelmaker, booked a third consecutive quarterly loss but raised its full-year outlook amid a recovery in exports to Asia and demand from the auto industry. [ID:nT289613]
Steel-making ingredient nickel MNI3 traded at a session high at $18,500 in LME rings from $17,800, while battery material lead MPB3 was untraded in rings but last bid at $2,320 from $2,231. Lead earlier rose more than 4 percent to $2,339.
On the supply side, PT Timah Tbk (TINS.JK: Quote, Profile, Research, Stock Buzz), the world's largest integrated tin miner, reported a sharp drop in third-quarter net profit. [ID:nJAK270804]
Zinc MZN3 traded at $2,225 a tonne in LME rings from $2,190 and tin MSN3 edged up to $14,900 from $14,650.
Metal Prices at 1337 GMT Metal Last Change Pct Move End 2008 Ytd Pct
move COMEX Cu 295.80 3.65 +1.25 139.50 112.04 LME Alum 1925.00 13.00 +0.68 1535.00 25.41 LME Cu 6509.00 79.00 +1.23 3060.00 112.71 LME Lead 2319.00 88.00 +3.94 999.00 132.13 LME Nickel 18380.00 580.00 +3.26 11700.00 57.09 LME Tin 14800.00 150.00 +1.02 10700.00 38.32 LME Zinc 2213.00 23.00 +1.05 1208.00 83.20 SHFE Alu 15120.00 -170.00 -1.11 11540.00 31.02 SHFE Cu* 50030.00 -1250.00 -2.44 23840.00 109.86 SHFE Zin 16465.00 -450.00 -2.66 10120.00 62.70 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Additional reporting by Maytaal Angel; editing by Sue Thomas)
