* Inventories fall as metal continues to leave warehouses
* US durable goods fall unexpectedly in June
* Fed's Beige Book shows US grew unevenly in recent weeks
* Coming Up: US weekly first-time jobless filings on Thur (Recasts, updates prices and market activity to New York close; new byline, changes datline previous LONDON)
By Carole Vaporean
NEW Y0RK, July 28 (Reuters) - Copper jumped on Wednesday, matching its May 10 high as global inventory drawdowns and gains in the euro boosted the red metal despite a surprise decline in U.S. orders for long-lasting goods.
Inventory draws in Shanghai indicated strong demand in China, the world's top copper consumer. The Chinese central bank said on Tuesday the country would not have a double-dip recession, even though economic growth would slow from its recent fevered pace.
Benchmark copper for three-month delivery on the London Metal Exchange CMCU3 closed at $7,165 a tonne, up from $7,059 at the close on Tuesday, after matching the high from May 10 at $7,205 per tonne.
In late business, the euro pared its gains and so did copper prices.
Despite conflicting readings on the economy, consistent declines in warehouse inventories have underpinned copper.
London Metal Exchange copper warehouse stocks have fallen sharply to 411,425 tonnes, down 2,375 tonnes on Wednesday, from a 6-1/2-year high set at 555,075 tonnes in mid-February.
"China's LME (warehouse) movements are going to drive this price over absolutely everything else," said Frank McGhee, head precious metals trader with Integrated Brokerage Services LLC in Chicago. "The outflows are flying in the face of all the rest of the markets right now."
Copper prices shrugged off a surprising drop in orders for durable manufactured U.S. goods. New orders for U.S. manufactured durable products fell for a second straight month in June, posting their largest decline since August. (STORY: [ID:nN2796989] TABLE: [ID:nCLASIE62J] )
The dollar fell against the euro as the weaker-than-expected reading on orders for U.S. durable goods added to fears about the U.S. economic outlook. [USD/] The euro's earlier gains made copper prices more attractive in euro-based markets.
Some analysts pointed out that underlying manufacturing results in the U.S. report were actually positive, boding well for economic growth and demand for copper.
"If you strip out aircraft and defense, you're left with a respectable rise of 0.6 percent. That core figure is encouraging, and if you look on a year-on-year basis, it's up 15.2 percent. That's consistent with a strong recovery in industrial production and durable goods orders," said Michael Woolfolk, senior currency strategist, BNY Mellon, New York.
In after-hours trade, copper prices briefly added to closing levels after the Federal Reserve released its Beige Book survey of regional economic growth.
Overall, the U.S. economy kept growing in recent weeks, but unevenly, and actually slowed in a few regions as housing markets softened once a popular tax break ended, the Federal Reserve said. [ID:nN28200227]
China's central bank said on Tuesday that Chinese economic growth would slow, but there would be no double-dip in the economy. [ID:nTOE66Q07U] These remarks followed well received comments last week from Premier Wen Jiabao, who said China would keep working to boost consumption.
"There's some seasonal weakness coming through, but generally I don't think there are any great worries about China," said Robin Bhar, an analyst at Credit Agricole.
Often seen as an indicator of economic activity, China's benchmark Shanghai Composite Index rose more than 2 percent to a two-month closing high. [ID:nTOE66R061]
"Sentiment has turned bullish again this morning following comments from the Peoples Bank of China regarding the nation's economic outlook," said James Moore, analyst at BaseMetals.com.
Among other metals, aluminium traded at $2,068 versus $2,056, down from an earlier two-month high at $2,086. Steel-making ingredient nickel was at $20,405 from $20,550, while battery material lead traded at $2,017.50 from $1,977. Zinc rose to $1,955 a tonne from $1,910, earlier touching its highest level since May 17 at $1,967.75. Tin edged down to $19,525 from $19,550 a tonne.
For a story on the LME's tie-up with the Singapore Exchange, click [ID:nSGE66R00Y] [ID:nLDE66Q16K] Metal Prices at 3:10 EDT (2010 GMT) Metal Last Change Pct Move End 2009 Ytd Pct
move COMEX Cu 323.80 -0.75 -0.23 334.65 -3.24 LME Alum 2065.00 9.00 +0.44 2230.00 -7.40 LME Cu 7170.00 111.00 +1.57 7375.00 -2.78 LME Lead 2010.00 33.00 +1.67 2432.00 -17.35 LME Nicke 20400.00 -150.00 -0.73 18525.00 10.12 LME Tin 19450.00 120.00 +0.62 16950.00 14.75 LME Zinc 1950.00 40.00 +2.09 2560.00 -23.83 SHFE Alu 15480.00 180.00 +1.18 17160.00 -9.79 SHFE Cu* 56200.00 1100.00 +2.00 59900.00 -6.18 SHFE Zin 16215.00 330.00 +2.08 21195.00 -23.50 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Michael Taylor and Rebekah Curtis in London; Editing by David Gregorio)