METALS-Copper rises on China demand hopes, euro zone a dampener

* Investors eye key China, U.S. data next week
* Spain to announce budget cuts, economic reforms
* Weak orders point to sharp slowdown in US manufacturing

By Harpreet Bhal
LONDON, Sept 27 (Reuters) - Copper rose on Thursday, on prospects that
demand from the metal's top consumer China could recover by the end of the year,
but a firmer dollar, an approaching Chinese holiday and concerns about Europe's
debt crisis kept gains in check.
Benchmark copper on the London Metal Exchange (LME)rose from
two-week lows hit in the previous session to close at $8,175 a tonne from a
close of $8,120 on Wednesday.
Data showed orders for long-lasting U.S. manufactured goods fell sharply in
August, suggesting the main engine of economic growth was stalling, pointing to
continued prospects of measures to support the economy. These
were seen as being supportive of copper prices.
Stimulus measures already announced by the U.S. Federal Reserve and the
European Central Bank have helped put copper on track for a gain of more than 7
percent for September. It is trading 7.5 percent higher in the year to date.
"People are a bit more clear on the macro outlook for China for the end of
the year. It is likely to register growth of just under 8 percent so that will
be positive for base metals," said Andrey Kryuchenkov, analyst at VTB Capital.
"But until we hear more about what is happening in Spain and the euro zone,
copper is likely to trade within its current range."
The dollar slightly pared losses versus the euro after U.S. data showed
pending home sales dipped in August due to a supply shortage. A stronger dollar
makes metals priced in the currency more expensive for holders of other
currencies.
Copper product makers in China, where demand is expected to improve modestly
in the fourth quarter, are getting their books in order before a week-long
holiday beginning on Monday that is likely to pare volume and direction from the
market.
China accounts for around 40 percent of global demand for refined copper.
"You're only two days away from the start of big holidays in China, so
people are looking to square books and cut risk," said Ivan Szpakowski, a Credit
Suisse analyst in Singapore.
"The other thing people have been looking at is how much central bank action
flows through to the real economy, but for that we may have to wait until top
tier data next week."
Economic data due next week is likely to provide fresh direction for metals
prices. China's National Bureau of Statistics manufacturing PMI for September is
due on Oct. 1, with U.S. non-farm payrolls data for September on Oct. 5.

SPAIN CONCERNS
Gains in base metals were capped by worries about the euro zone debt crisis
and uncertainty about a bailout for Spain.
Spain announced a detailed timetable for economic reforms and a tough 2013
budget based primarily on spending cuts on Thursday in what many see as an
effort to pre-empt the likely terms of any international bailout.

Euro zone economic sentiment defied expectations of stabilisation and again
fell sharply in September, underlining the economic gloom brought on by the
sovereign debt crisis.
In other metals, battery material lead closed at $2,270 a tonne,
from Wednesday's close of $2,264, while tin closed at $21,195 from
$20,800.
Aluminium ended at $2,108 a tonne, from a last bid of $2,071 on
Wednesday, and nickel at $18,345 a tonne from a last bid of $18,055.
Colombia's government said it expects output from the Cerro Matoso nickel
mine to rise to 51,100 tonnes in 2012 from 37,810 last year. It also announced
it would renegotiate outdated contract terms including royalty payments from the
BHP Billiton mine.
Global miner Xstrata said it was suspending operations at its Cosmos
nickel mine in Western Australia due to prolonged weakness in prices for the
metal and a strong Australian dollar.
Zinc closed at $2,083 from $2,071 at the close on Wednesday.

Metal Prices at 1633 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 373.70 2.50 +0.67 344.75 8.40
LME Alum 2106.25 1.25 +0.06 2020.00 4.27
LME Cu 8203.75 83.75 +1.03 7600.00 7.94
LME Lead 2281.25 17.25 +0.76 2034.00 12.16
LME Nickel 18365.00 -35.00 -0.19 18650.00 -1.53
LME Tin 21140.00 340.00 +1.63 19200.00 10.10
LME Zinc 2092.75 21.75 +1.05 1845.00 13.43
SHFE Alu 15695.00 10.00 +0.06 15845.00 -0.95
SHFE Cu* 59100.00 -20.00 -0.03 55360.00 6.76
SHFE Zin 15580.00 30.00 +0.19 14795.00 5.31
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07