* Investors concerned about growing surplus
* Italian PM wins confidence vote
* Liquidity thin with China away for holiday
By Freya Berry and Silvia Antonioli
LONDON, Oct 2 Copper turned positive after hitting a one-week low on Wednesday as the dollar fell sharply against the euro on weak U.S. job data and as the European Central Bank decided to keep rates unchanged.
Benchmark three-month copper on the London Metal Exchange was up more than 1 percent at $7,271.50 a tonne by 1455 GMT, from a close of $7,199 on Tuesday.
Copper, used in power and construction, was in negative territory during European trading hours, falling to its weakest in a week at $7,142, on worries about the impact of the first partial U.S. government shutdown in 17 years.
It then recovered and turned positive after a surprisingly weak U.S. private sector jobs report sapped the dollar, while European Central Bank President Mario Draghi provided a firm boost to the euro by sticking to the ECB's current stance on monetary policy.
A softer U.S. unit against other currencies makes dollar-priced metals cheaper for non-U.S. investors.
Copper has lost more than 8 percent this year.
"What might have led the copper prices up today is the weaker dollar. The prices, despite recovering a bit today, are still below the levels which we consider to be fair," said Eugen Weinberg, head of commodities research at Commerzbank.
"We do believe that Chinese demand picked up in the summer, and improving indicators are pointing to the direction that the Chinese economy is again back on the growth path. That is the single most important factor behind our expectations for higher copper prices."
Trading volume was thin with China, which accounts for 40 percent of global refined copper demand, away until Oct. 7 for National Day holidays.
Appetite for riskier assets such as base metals also improved after Italian Prime Minister Enrico Letta won a confidence vote in the Senate.
Some investors however were worried about the longer-term prospects for the metal, due to a looming supply surplus.
"As new supply arrives during 2014-15, the market is likely to move into a lengthy period of oversupply, which will gradually push copper prices lower," Natixis said in a note.
"While physical scarcity may help to support spot prices over the remainder of this year, the medium term outlook for copper prices is for a steady decline."
In other metals, soldering metal tin was down 0.6 percent at $22,904 a tonne from $23,050 at the close on Tuesday, having earlier hit a near-three week low of $22,550.
Aluminium was at 0.9 percent at $1,843.75 and nickel was up 0.3 percent at $13,797 against a previous close of $13,750.
Zinc was up 0.3 at $1,884.50 a tonne, from $1,878 on Tuesday while lead rose 0.6 percent at $2,077 from a previous close of $2,065.