METALS-Copper rises again on Merkel comments, U.S. data

* U.S. consumer sentiment at three-month high in August
* LME aluminium bounces off Thursday's three-year low

By Josephine Mason and Harpreet Bhal
NEW YORK/LONDON, Aug 17 (Reuters) - Copper prices rose for a second session
on Friday as upbeat U.S. consumer confidence data and supportive comments from
German Chancellor Angela Merkel on solving the euro zone crisis offset concerns
about China's slowing economy.
Three-month copper on the London Metal Exchange ended at $7,539 a
tonne, up from $7,449 at the close on Thursday, when it rose 0.9 percent.
COMEX copper for September delivery rose 3.7 cents, or 1.09 percent,
to settle at $3.4195 per lb, near the upper end of its $3.4245 to $3.375 session
range.
The market ended almost 1 percent higher on the week, notching gains for a
second week as players weighed improving U.S. economic data against hopes the
world's leading central banks will take action to boost their economies.
The Northern Hemisphere summer holiday crimped volumes, with 53,925 COMEX
copper contracts traded, 14 percent below the 250-day average. Prices were also
stuck in recent ranges ahead of key events, including a speech by Federal
Reserve Chairman Ben Bernanke in Jackson Hole at the end of August.
Positive economic indicators released on Friday buoyed sentiment, already
boosted by better-than-expected U.S. retail sales earlier in the week, and
helped copper resist pressure from a weaker euro.
The market outperformed the broader commodities complex, with the
19-commodity Thomson Reuters-Jefferies CRB index up 0.36 percent.
On Friday, data showed U.S. consumer sentiment improved in early August,
while a gauge of future U.S. economic activity also improved in July.

The Thomson Reuters/University of Michigan consumer sentiment survey rose to
its highest level in three months as sales at retailers and low mortgage rates
spurred Americans to boost their buying plans.
"The U.S. economy, in particular, has stood out from the rest, with some
early signs that the economy is beginning to recover from its mid-cycle
slowdown, just like we saw in 2011," Ole Hansen, head of commodity strategy at
Saxo Bank, said.
Investors fear though that the tentative recovery in the world's largest
economy could be derailed if China's economy continues to slow, which would hurt
demand for industrial metals.
Comments by Merkel offered a glimmer of hope that euro zone policymakers
might be nearer to resolving their differences and working closely to tackle the
debt crisis.
The German chancellor gave her backing for European Central Bank President
Mario Draghi's crisis-fighting strategy and pressed her European partners to
move swiftly toward a closer integration of fiscal policies, saying time was
running short.
"Investors were particularly impressed with a statement put out by German
Chancellor Angela Merkel. In normal market conditions, such utterances would
typically not cause much of a stir, but given the dearth of news and how thin
trading has become, traders are grasping at whatever comes their way," INTL
FCStone analyst Edward Meir said in a note.
The latest data shows inventories of copper in warehouses monitored by the
LME have declined to their lowest levels since early June, which analysts say
could lead to a squeeze and a run-up in prices. Stocks have fallen by around
20,000 tonnes from summer highs to 234,550 tonnes.

CHINA
In China, the top metals consumer, government comments have stirred hopes
for more policy action to stimulate the economy, with some reports saying steps
could come as early as the weekend. The country's trade outlook has worsened as
problems deepen in Europe and growth in foreign direct investment slows.
China's smelters are lobbying the government to revive a state-run scheme to
stockpile industrial metals, which would support prices and possibly lead to a
surge in imports, industry sources have said.
LME aluminium closed at $1,858 a tonne, bouncing from a three-year
low of $1,827.25 hit on Thursday, but still at levels considered to be at cost
of production for many smelters. Traders attributed the volatility to the
metal's weak fundamentals, with more cuts in output needed to eat into the
global surplus.
LME zinc closed at $1,797 a tonne, bouncing off a 1-1/2-month low
hit in the previous session, when it closed at $1,784.5.
Tin ended at $18,495, from $18,105 at the close on Thursday. Lead
closed at $1,895 from $1,847, and nickel ended at $15,630 from
$15,525.

Metal Prices at 1929 GMT

Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 341.80 3.55 +1.05 343.60 -0.52
LME Alum 1857.00 15.00 +0.81 2020.00 -8.07
LME Cu 7538.00 89.00 +1.19 7600.00 -0.82
LME Lead 1894.00 47.00 +2.54 2035.00 -6.93
LME Nickel 15630.00 105.00 +0.68 18710.00 -16.46
LME Tin 18495.00 390.00 +2.15 19200.00 -3.67
LME Zinc 1796.50 12.00 +0.67 1845.00 -2.63
SHFE Alu 15295.00 95.00 +0.63 15845.00 -3.47
SHFE Cu* 54850.00 430.00 +0.79 55360.00 -0.92
SHFE Zin 14500.00 120.00 +0.83 14795.00 -1.99
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07