LONDON Copper closed near six-week lows on Wednesday as the dollar rose and investor sentiment soured on weak euro zone data, but signs of recovery in top metals consumer China limited losses.
Investors were also reticent ahead of a Federal Reserve policy statement due later on Wednesday.
China's economy is slowly picking up from its weakest period of growth in three years, a survey of purchasing managers (PMI) signaled, with new orders and output at their highest in three months.
Euro zone PMIs were weak, however. Data for October showed businesses suffered their worst month since the bloc emerged from its last recession more than three years ago, forcing them to cut more jobs to reduce costs.
German business sentiment dropped for the sixth successive month in October, in a surprise fall that was bigger than even the lowest forecasts, signaling that the debt crisis is hitting home in Europe's largest economy.
Benchmark three-month copper on the London Metal Exchange closed at $7,817 a metric tonne from a close of $7,831 a tonne on Tuesday. It touched $7,807.75 on Tuesday, its lowest level in six weeks.
"I don't think one should expect too much from China in terms of a pick-up given the government is in transition. Also post LME Week most people are neutral towards metals," said Societe Generale analyst Robin Bhar, referring to the annual metals industry event that took place last week.
"The negative news is priced in but, equally, until economies start to move higher, we're not going to challenge the upside."
The Fed's two-day meeting ends later in the session, though analysts expect it will hold off from taking fresh monetary easing steps, and will instead review the impact of the significant action it took last month.
The euro slipped against the dollar after the unexpectedly weak German data stoked concern the euro zone's largest economy may be headed for recession. A stronger dollar makes commodities priced in the currency more expensive for holders of other currencies.
Over the next few months, market players will also look out for new policies by Beijing that may affect metals demand, with a leadership change at the Communist Party Congress on November 8
"London copper is buoyed by today's PMI numbers, but Shanghai copper was mainly held back from further gains by a still-sluggish Chinese copper physical market," said Orient Futures analyst Andy Du.
In a sign of weak demand, Shanghai Futures Exchange spot copper prices traded at a discount of up to 200 yuan to the ShFE front month contract earlier, a bigger spread than the previous session.
Also, China's September copper imports jumped 6.93 percent on the year, but the gain was largely due to the arrivals of term shipments booked last year rather than a spike in demand.
Lead closed at $2,008 a tonne, having hit its lowest level since early September at $2,006 earlier. It closed at $2,023 on Tuesday.
LME lead stocks fell by 1,575 metric tonnes (1736 tons) to total 310,975, with most withdrawals seen in Johor, a backlogged warehouses location. Total stocks, however, continue to climb strongly, with large deliveries concentrated in the Belgian port of Antwerp.
The increases are weighing on lead, as is data from the Lisbon-based International Lead and Zinc Study Group (ILZSG) that showed the global lead market was in surplus by 80,000 tonnes in the first eight months of the year.
The data also showed the global zinc market was in surplus by 128,000 tonnes in the first eight months of the year.
Zinc closed at $1,855 a tonne from $1,847 at the close on Tuesday.
Tin closed at $20,275 a tonne from $20,255 and nickel at $16,390 from $16,355. Aluminum ended at $1,938.50, having hit its lowest since early September at $1,925, from a last bid of $1,947 on Tuesday.
(Reporting by Maytaal Angel; editing by William Hardy and Keiron Henderson)
(This story corrects closing kerb price for copper to $7,817 from $7,8217)