* Shanghai copper stocks down 3.6 pct from a week ago
* Market still encouraged by China manufacturing rebound
* LME closed on Monday for a bank holiday
By Harpreet Bhal and Maytaal Angel
LONDON, Aug 23 Copper rose on Friday as signs of
re-emerging appetite for the metal in top consumer China boosted
the demand outlook and helped offset concerns over a tapering of
monetary stimulus in the United States.
Data showed copper inventories in warehouses monitored by
the Shanghai Futures Exchange fell 3.6 percent from last Friday
to 156,110 tonnes. China accounts for about 40
percent of global copper demand.
"Copper is definitely not in the kind of surplus that people
thought it was. LME and Shanghai stocks are dropping for now,
and stocks at (Chinese) bonded warehouses are at relatively low
levels," said Natixis head of commodities research Nic Brown.
"You had a bit of carnage earlier this week in a number of
emerging markets (because of) the Fed taking away surplus
liquidity ... but for copper the focus is more on China."
Benchmark copper on the London Metal Exchange (LME)
ended at $7,360 a tonne, up from a close of $7,320 on Thursday.
The metal is trading down around 7 percent in the year to date,
Limiting gains in copper was data out from the United States
earlier showing sales of new single-family homes in America fell
sharply in July to their lowest level in nine months, casting a
shadow over the country's housing recovery.
Overall though, sentiment has been supported this week by
data showing a rebound in Chinese manufacturing, as well as
upbeat manufacturing numbers from the United States and
better-than-expected economic growth in the euro zone.
Data also showed domestic demand drove a broad-based upturn
in Germany between April and June, contributing to the strongest
quarterly expansion in more than a year and fuelling optimism
the economy could outperform in 2013.
Encouraging U.S. economic data, however, also raised
concerns that a recovery in the economy would support the case
for the Federal Reserve to begin reining in its stimulus
measures sooner rather than later.
Ultra-loose monetary policy adopted by central banks around
the world in the last few years has drawn investors to
commodities as an alternative to interest-bearing assets.
Copper prices are set to draw support from demand from China
which, according to Europe's biggest copper producer Aurubis, is
expected to import more of the metal in coming months as the
country's industrial production recovers and new infrastructure
"People have been getting a bit more optimistic on Chinese
growth and demand. China's official PMIs are probably going to
look strong as well," said analyst Sijin Cheng at Barclays in
Singapore. China's official purchasing managers' index or PMI is
due next week.
In other metals traded, aluminium ended up 0.48
percent at $1,893 a tonne, zinc ended up 0.63 percent at
$1,986.50 a tonne, while lead closed up a slight 0.05
percent at $2,210 a tonne.
Tin ended down 0.57 percent at $21,750 a tonne,
while nickel was up 0.66 percent at $14,525 a tonne.