LONDON, March 5 (Reuters) - Copper rose 1.8 percent on Friday, rebounding from losses in the previous session, as equities gained on an improving economic outlook, and investors eyed the release of key payrolls data in the United States.
By 1041 GMT, copper for three month delivery CMCU3 on the London Metal Exchange traded at $7,500 a tonne from $7,370 at the close on Thursday and compared with a session high at $7,503.75.
"If you look at the Asian markets -- quite a bit stronger overnight," said Daniel Brebner, a London based metals analyst Deutsche Bank. "The U.S. data yesterday came in with some pretty decent numbers and risk-aversion looks like it's declining a little bit with some resolution in Greece."
"It looks like there is confidence creeping back into these markets," he added. "How long that last is anyone's guess. The payrolls data could be important today."
Asian shares surged on Friday after encouraging U.S. retail sales and jobs data suggested Asia's biggest export market was stabilising. [MKTS/GLOB] [.EU] [ID:nN04258755]
U.S. jobs data at 1330 GMT, is expected to show the number of people working in the United States fell in February as winter storms that pounded parts of the country kept some workers at home. [ID:nN04252324]
Analysts said however, that better-than-expected economic data was likely to lead to interest rate rises in the United States and a withdrawal of economy stimulating measures.
Prices of the red metal, used in power and construction, were also buoyed by a fall in LME inventories -- a possible sign that demand outside China is improving.
Copper stocks fell 1,075 tonnes to 543,150 tonnes -- levels not seen since early February and maintaining a downward trend that has developed throughout March.
Copper touched a five-week peak in prices on Monday after a weekend earthquake forced top producer Chile to temporarily shut down nearly a quarter of its mine capacity. [ID:nCHILE]
"Stock drawdowns have given people a good start to the day," said Nick Moore, global head of commodity strategy, RBS Global Banking & Markets. "But eventually, if not later today then early next week, the theme will be selling pressure as people realise that outside of the quake ... all producers have come out and said minimal or no production losses at all." Aluminium CMAL3 traded at five-week highs at $2,248 versus $2,215. LME stocks for the metal, used in transport and packaging, slipped 6,850 tonnes to 4.5 million tonnes.
A large portion of those aluminium stocks are tied up in finance deals, to release cash for producers and to earn banks higher returns than they would get in money markets. [ID:nGEE5BA277]
CHINA POLICY
Industrial metal prices were also supported by China, the world's largest metals consumer, which signalled it would maintain its economic stimulus, supporting hopes that demand would remain firm.
Chinese Premier Wen Jiabao, in his annual address to the National People's Congress, said the country would stick to an appropriately easy monetary stance and an active fiscal policy to counter the lingering impact of the global credit crunch. [ID:nTOE6230AE]
"The market is looking at this in a positive way, which is deserved," said Brebner. "But while the overall message was quite positive, the government continues to be clearly focused on minimizing inflationary threats and will work quite vigerously toward that."
Chinese buying, combined with improving economic data, fund money and a weaker dollar, helped boost copper by about 140 percent last year.
Among other base metals, steel making ingredient nickel CMNI3 traded at $22,725 from $22,300, while battery material lead CMPB3 was at $2,198 from $2,170.
Zinc CMZN3 traded at $2,293 a tonne from $2,259 and tin CMSN3 was at $17,525 from $17,250.
Metal Prices at 1043 GMT Metal Last Change Pct Move End 2009 Ytd Pct
move COMEX Cu 336.90 0.85 +0.25 332.75 1.25 LME Alum 2241.00 26.00 +1.17 2230.00 0.49 LME Cu 7488.00 118.00 +1.60 7375.00 1.53 LME Lead 2196.00 26.00 +1.20 2432.00 -9.70 LME Nickel 22600.00 300.00 +1.35 18525.00 22.00 LME Tin 17425.00 175.00 +1.01 16950.00 2.80 LME Zinc 2287.00 28.00 +1.24 2560.00 -10.66 SHFE Alu 16730.00 45.00 +0.27 17160.00 -2.51 SHFE Cu* 59750.00 430.00 +0.72 59900.00 -0.25 SHFE Zin 18430.00 240.00 +1.32 21195.00 -13.05 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Reporting by Michael Taylor; editing by Keiron Henderson)
