Global copper prices recover on China move

LONDON, March 7 (Commodity Online): Global copper prices recovered in European trade Friday as China signaled it would maintain its economic stimulus, supporting hopes that demand from the world's top consumer of industrial metals would remain firm.

However, trading was slow ahead of crucial US payrolls data expected to show a big loss of jobs due to major snowstorms last month.

Three-month copper on the London Metal Exchange rose $80 to $7,450 a tone, up 3.5 per cent on the week, due to big gains fuelled by initial supply worries after a massive weekend quake hit top producer Chile.

Chinese Premier Wen Jiabao, 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.

Analysts say the move suggests demand from China will stay strong as it feeds its economy targeted to grow 8 per cent this year.

Shanghai's benchmark third-month copper gained 430 yuan to close at 59,750 yuan ($8,753) a tonne, posting a 3 per cent weekly gain.

Copper stocks at warehouses monitored by the Shanghai Futures Exchange dropped a small 858 tonnes from the previous week to 148,620 tonnes, the exchange said.

That compared to a 28 per cent jump the prior week which brought inventory to 149,478 tonnes, the highest level since late September 2002.

Shanghai copper's premium over LME copper has dwindled to about 250 yuan on Friday from around 1,000 yuan a week ago.

LME copper prices are up just 1 per cent this year after surging more than 140 per cent in 2009 largely on Chinese demand which some analysts say should stay sturdy to support robust growth as recovery elsewhere in the world remains shaky.