US copper ends up as dollar, supply fears support

NEW YORK, July 31 (Reuters) - U.S. copper futures ended slightly higher on Thursday as a weaker dollar and supply-side concerns helped keep prices buoyed in the face of a slower global economic environment.

NOTE: For detailed report, click on [MET/L].

* Copper for September delivery HGU8 closed up 1.55 cent at $3.6615 a lb on the the New York Mercantile Exchange's COMEX division.

* Range from $3.6390 to $3.7035.

* By 1 p.m. EDT (1700 GMT), COMEX estimated volume at 11,537 lots. Final volume Wednesday totaled 26,602 lots.

* Open interest rose by 1,203 lots to 109,437 contracts as of July 30.

* Copper up in extension of Wednesday's technical rebound, with a stronger precious metals complex and currency-related buying providing a modest push higher - Zachary Oxman, senior trader with Wisdom Financial in Newport Beach, California.

* Dollar retreated from one-month highs against the euro on Thursday, after a surprise jump in U.S. weekly jobless claims and below-forecast economic growth in the second quarter reduced prospects for Federal Reserve interest rate hikes this year.

* Gross Domestic Product grew at a 1.9 percent annual rate, up from a revised 0.9 percent in the first quarter, which previously was reported as 1 percent.

* "The majority of the growth was boosted by the stimulus checks, and I don't think it's something you're going to see repeated in the next couple of quarters," said Oxman.

* A downward revision showing a 0.2 percent contraction in GDP during the final quarter of 2007 revived the debate on whether the world's largest economy was in, or close to, a recession.

* Copper underpinned by supply tightness, highlighted by Grupo Mexico's (GMEXICOB.MX) announcement on Wednesday that it had not set a date to resume copper production at its giant Cananea mine due to a year-long strike. [ID:nN30460243]

* Chile state copper commission Cochilco on Thursday raised its average copper price forecast for 2008 to $3.70 per pound from $3.10 previously, citing a weak dollar and weaker-than-expected output. [ID:nN31157227]

* This follows lower production guidance from Chile's Codelco and U.S.-based Freeport McMoran, while BHP Billiton Ltd/Plc warned output from its Escondida mine --accounting for almost 10 percent of world supply -- would drop 10 to 15 percent in the 2009 financial year.

* "Despite the economic slowdown, we believe these disruptions will keep the global market in deficit" - Tony Rizzuto at Dahlman Rose & Co.

* London Metal Exchange warehouse stocks jumped 4,450 tonnes to 142,400 tonnes on Thursday.

* COMEX copper stocks were unchanged at 6,838 short tons on Wednesday.

* LME copper for delivery in three-months MCU3 hit a weekly high at $8,175 a tonne, before closing at $8,060 a tonne, down from $8,030 on Wednesday. (Reporting by Chris Kelly; Editing by Walter Bagley)