NEW YORK/LONDON, June 24 (Reuters) - Copper rallied over 2 percent on Thursday as investors eyed improved demand signals, including rising durable goods orders in the United States and strong Japanese output data.
Copper for July delivery HGN0 on the COMEX metals division of the New York Mercantile Exchange surged 7.00 cents, or 2.4 percent, to end at $3.0055 a lb, near the upper end of its session range of $2.94 to $3.0130.
Steve Platt, futures analyst with Archer Financial Services in Chicago, cited technical reasons behind the advance, after prices tested and held the 20-day moving average at $2.9475 per lb.
"We held the 20-day average and subsequently started to take out yesterday's high, which helped uncover some additional short-covering," he said.
On the London Metal Exchange, benchmark copper for three-months delivery CMCU3 gained $175 to close at $6,695 a tonne.
Sentiment improved after data showed new U.S. claims for jobless benefits fell last week and orders for long-lasting manufactured goods excluding transportation rebound in May, both offering hope for the fragile economic recovery.
"We're mainly up on the back of the better-than-expected durable goods orders," Citigroup analyst David Thurtell said. "And perhaps people have seen the worst after the recent poor data so we've had a bit of a recovery."
Earlier, preliminary figures showed Japan's output of rolled copper product rose 50.4 percent from a year earlier to 72,627 tonnes in May. Japan's is the world's second-largest economy.
"It looks like Asian demand is still fairly good for the market," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.
FALLING STOCKS SHOW SOLID DEMAND
Indicating solid demand for copper, the latest data showed LME copper stocks fell 1,725 tonnes to 454,700 tonnes, their lowest since early December 2009. Stocks have been falling consistently from a peak of 555,025 in February this year.
Aluminum CMAL3 rose $20 to end at $1,962 a tonne, with LME stocks falling 10,300 tonnes to total 4.45 million tonnes. Although high, the figure is off the record peak at 4.6 million.
Between 70 and 80 percent of aluminum stocks are tied up in financing deals and unavailable to consumers. Aluminum demand is rising as indicated by improved premiums this year and falling stocks.
BASEU1 Zinc CMZN3 firmed $45 to close at $1,875 and lead CMPB3 edged up $5 to $1,820. Zinc prices are up about 18 percent from a low of $1,577, hit in early June.
A LME trader said orders for zinc were coming in, indicating demand for the metal, and that some players with short positions -- bets on lower prices -- were being forced to cover those positions.
Tin CMSN3 climbed $300 to close at $18,150 a tonne and nickel CMNI3 added $125 to end at $19,400.