METALS-Copper falls with euro, demand questioned
* Dollar strengthens against euro after ECB comments
* LME copper stocks tumble
* Coming up: U.S. non-farm payrolls data due Friday (Recasts, updates prices, market activity to New York close; changes byline, dateline, previously LONODN)
NEW YORK, March 4 (Reuters) - Copper ended lower on Thursday as the euro gained against the dollar, mixed U.S. economic readings put demand in question and funds sold metals across the board.
Benchmark copper for three-month delivery CMCU3 on the London Metal Exchange ended sharply lower at $7,370 a tonne from $7,580 on Wednesday.
In New York, most active copper for May delivery HGK0 fell 5.95 cents, or 1.73 percent, to finish at $3.3755 per lb on the New York Mercantile Exchange's COMEX division.
The euro's descent on the dollar sparked metal sales across the board. The euro dropped after Europe's central bank chief said recovery would be uneven, reducing chances of a near-term rise in record low euro zone interest rates. [USD/]
"Copper had a sell-off, accompanied by the rest of the metals, I think predominantly based on the statements from the ECB on not raising rates. That hit the euro and put a cap on all the metals," said Frank McGhee, head precious metals trader with Integrated Brokerage Services LLC in Chicago.
Dollar-denominated copper tends to fall when the U.S. currency rises, making the red metal more expensive for overseas investors.
Mixed U.S. economic news also pressured copper. January reports cast doubt on prospects for economic growth, dimming hopes for stronger copper demand.
New orders at U.S. factories rose 1.7 percent in January, led by a big jump in orders for commercial aircraft, though contracts for pending sales of previously owned homes fell unexpectedly. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
* U.S. PENDING HOME SALES: Story: [ID:nN04154147] Table: [ID:nWEQ003825]
* U.S. FACTORY ORDERS: Story: [ID:nN03257330] Table: [ID:nCAT005122] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Copper has eked out gains of just 0.6 percent so far this year, with Chinese buying softening as the world's top base metals consumer moves to a less accommodative monetary policy to cool rapid growth. Chinese demand helped copper surge 140 percent in 2009. [ID:nTOE62301C]
Moreover, Western demand is recovering slowly.
"There haven't been any particular signs of a very strong demand recovery in copper or other base metals outside China," said Daniel Major, analyst at RBS Global Banking and Markets.
The fall in copper, used in power and construction, followed a five-week peak in prices on Monday after an earthquake forced top producer Chile to temporarily shut down nearly a quarter of its mine capacity. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
For more on the Chile quake, see [ID:nN28135112] [ID:nCHILE] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
A series of reports from Chile have affirmed that mining operations are now running with little overall impact, though some smelters and refineries remained shuttered.
Chilean-owned top producer Codelco on Thursday reported quake impact of less than 0.5 percent of annual output. [ID:nN04136817]
Traders also watch stock movements for clues on demand outside China. Thursday showed a steep 6,350-tonne decline to 544,225 total tonnes, near a six-year high.
Aluminium CMAL3 ended at $2,215 versus $2,210, steel-making ingredient nickel CMNI3 closed at $22,300 from $22,845 and tin CMSN3 at $17,250 from a last bid of $17,350 on Wednesday.
Tin earlier hit a one-month high of $17,850, while nickel touched $23,040, the highest since June 2008.
Battery material lead CMPB3 ended at $2,170 from $2,238.50 and zinc CMZN3 at $2,259 a tonne from $2,320.
For results from miner Kazakhmys, see [ID:nLDE6220M2]. (Additional reporting by Pratima Desai, Rebekah Curtis and Michael Taylor in London; Editing by David Gregorio)
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