US copper rises to 1-week high on China buys, data

Copper rose to a one-week high in New York futures trade on Wednesday after reports of increased Chinese buying and upbeat data from China and the United States helped extend a two-day rally in the metal.
For detailed report on global copper markets, click on [MET/L]
Copper for March delivery HGH9 rose 0.90 cent to settle at $1.5310 a lb on the New York Mercantile Exchange's COMEX division.
Session range from $1.5030 to $1.5695, a high dating back to Jan. 27.
Potential double bottom forming in benchmark March copper contract, with neckline at $1.60. A breach of that level (on a settlement basis) would confirm the pattern and open the way for the target just above $1.81 - Citigroup's CitiFX.
COMEX estimated volume at 16,525 lots by 1 p.m. EST (1800 GMT). Final volume on Tuesday hit 17,883 lots.
Open interest declined by 1,285 lots to 87,299 contracts open as of Feb. 3.
Copper buoyed by reports China has started buying copper from domestic bonded warehouses and overseas markets in a move to gradually triple its state reserves to about 1 million tonnes. [nSHA29168]
China is the world's largest copper consumer, accounting for nearly 25 percent of global demand.
Improved Chinese manufacturing data coupled with a surge in bank lending raised speculation that the world's third largest economy may soon be on the road to recovery. [ID:nSP241879]
Less severe contraction in U.S. private sector jobs and in the services sector added to the red metal's positive tone.
The Institute for Supply Management said its non-manufacturing index came in at 42.9 in January compared with 40.1 in December. [ID:nN04508901]
Copper up on follow-through momentum from data on Tuesday showing a 6.3 percent rebound in U.S. pending home sales during the month of December. [ID:nN03281919]
Copper may retrace a part of its short-term rally this week in response to a weaker jobs number on Friday - traders.
U.S. non-farm payrolls are estimated to have shed more than half a million jobs in January. [ID:nN04455795]
Uncertain demand outlook stemming from rising warehouse stockpiles in London to further cap red metal's upside price potential - analysts.
London Metal Exchange warehouse stocks added another 4,650 tonnes on Wednesday, bringing total inventory levels to 499,950 tonnes, their highest since November 2003.
* COMEX copper stocks decreased by 350 short tons to 40,905 short tons as of Tuesday.Chile's Escondida, the world's largest copper mine, said on Tuesday 2008 copper output fell 15.43 percent due to lower ore grades and maintenance work on a grinding mill. [ID:nN03545909]
South Korea said it would raise its base metals reserves by 37 percent in 2009 ahead of potentially higher demand later in the year when the economy is expected to recover. [ID:nSEO201089]
Mexico's mining union, which has led an 18-month-long strike at one of the country's largest copper pits, said it negotiated a wage deal with Goldcorp on Tuesday. [ID:nN03321967]
London Metal Exchange copper for three months delivery MCU3 closed up $45 at $3,415 a tonne.Range from $3,332 to $3,472.