NEW YORK, March 3 (Reuters) - Copper rose on Wednesday, hitting a seven-week high as the dollar fell against the euro, making metals cheaper for non-U.S. investors amid signs that demand was improving cropped up in the U.S. and Asia.
Benchmark copper CMCU3 on the London Metal Exchange ended at $7,580 a tonne, up from a close of $7,490 on Tuesday. The red metal, used in power and construction, touched a session high of $7,634, its highest since Jan. 11.
In New York, most active copper for May delivery HGK0 finished with 2.35 cent gains at $3.4350 per lb on the New York Mercantile Exchange's COMEX division.
The contract reached a high of $3.4720, near the seven-week high hit Monday at $3.4870 after Chile's earthquake.
The euro strengthened after debt-laden Greece endorsed a 4.8 billion euro austerity package, to ensure it met key fiscal targets. Dollar-denominated copper tends to rally when the euro gains.
Copper rose "because the situation in Greece has gotten better, so the euro's rise was very strong. I think that had a lot to do with it," said Donald Selkin, chief market strategist with National Securities Corp. In New York,
Robust data from the U.S. services sector did little to help the dollar, but added to other data showing improvement in U.S. economic growth.
In COMEX after-hours trade, the Federal Reserve released its Beige Book report showing increased U.S. economic growth.
The anecdotal Beige Book reported modestly stronger economic activity across most of the 12 Fed districts during February despite heavy snowstorms in many areas.
Also supporting copper was a rise in canceled warrants in LME warehouses. Material tagged for delivery rose to 35,975 tonnes on Tuesday from 29,800 the previous day, and was up from 14,000 a week earlier.
Canceled warrants now constitute 6.5 percent of total LME copper stocks, which last fell 1,750 tonnes to 550,575 tonnes.
Demand from China helped copper surge 140 percent in 2009 in the absence of Western demand, but the world's third-largest economy has been buying less copper as it tightens monetary policy to temper rapid growth.
But some analysts pointed to the canceled warrants and Wednesday's drop in London Metal Exchange warehouse stocks as indication that China may be gearing up its purchases.
"You have slightly lower inventories and increased bookings. That could be showing better demand," said Serkin.
CHILE IMPACT EASES
Traders said the impact from Chile's weekend earthquake lessened, but still underpinned prices.
After two large aftershocks in Chile on Wednesday, top copper producer Codelco said its operations were not affected, [ID:737-800S] and it was exporting normally.
Anglo American PLC (AAL.L) said copper production lost after Chile's weekend earthquake amounted to less than 1,500 tonnes, with minor damage at its mining operations. [WB.N]
Chile's copper mines, which produce a third of global supply, emerged almost unscathed from Saturday's massive 8.8-magnitude quake which killed almost 800 people, toppled buildings, shattered key highways and downed power lines.
Steel ingredient zinc CMZN3 closed at $2,320 from $2,255, battery material lead CMPB3 at $2,238.50 from $2,200, and tin CMSN3 was untraded at the close, but bid at $17,350 from $17,075 a tonne on Tuesday.
Stainless ingredient nickel CMNI3 hit $22,943, its highest since June 2008. It closed at $22,845 from $22,240 on Tuesday. It is up about 20 percent so far this year.