LME copper ticks up but China policy hike worries linger

SINGAPORE, Jan 21 （Reuters） - London copper prices rose on Friday, after shedding 2.3 percent in the previous session on concerns that China may tighten monetary policy in the wake of strong macroeconomic data, while Shanghai fell, catching up with the previous decline in the international market.

FUNDAMENTALS

* Three-month copper on the London Metals Exchange rose $17 to $9,372 a tonne by 0103 GMT. The metal hit a record high of $9,781 on Wednesday. Shanghai's benchmark third-month copper futures contract fell 1.5 percent to 70,520 yuan a tonne.

* A sharp jump in China's annual growth rate and a smaller-than-expected slowdown in December inflation pressures fed expectations of further policy tightening measures that could hurt the country's demand for base metals.

* But the falls in prices really only got going after Western markets opened on Thursday. At the time Shanghai closed, some five hours after the data release, LME copper was flat.However Shanghai equities had posted a 2.9 percent fall.

* Shanghai copper traded around 2,130 yuan below LME, having narrowed from 3,000 yuan or  more over about a week. The prompt to three months contango in Shanghai is also narrowing, hinting that Chinese copper supply may be tightening up.

* Market looking ahead for the final batch of Chinese trade data for 2010.

* Aluminium licked higher, shrugging off news that Rio Tinto  has terminated force majeure at its Boyne Island smelting division in Australia's Queensland state as transportation returned to normal.      

 MARKET NEWS  

* Stocks fell on Thursday as lacklustre tech and materials earnings failed to live up to heightened expectations, threatening to short-circuit a seven-week run.

*  The dollar clung on to overnight gains early in Asia on Friday in the wake of upbeat data, even as the euro held its ground with investors wary of getting too bearish on the common currency after a recent rally turned sentiment around.

* U.S. home resale figures jumped more than expected in December and claims for new jobless claims last week posted their biggest decline in nearly a year, showing two key economic trouble spots on the mend. 

* Spot gold edged up 0.1 percent to $1,346.91 an ounce by 0030 GMT, after sliding to a two-month low of $1,342.65 in the previous session.