Aug 23, 2011 NEW YORK (Dow Jones)--A pair of better-than-expected readings on global manufacturing lifted copper futures Tuesday as traders bet on increased demand for industrial metals.

The most actively traded copper contract, for September delivery, recently traded 3.55 cents, or 0.9%, higher, at $3.991 a pound on the Comex division of the New York Mercantile Exchange.

Manufacturing activity in China contracted for a second straight month in August, but by less than July levels, HSBC Holdings PLC said Tuesday in its preliminary purchasing managers index. The reading stood at 49.8 in August, from 49.3 in July.

"Although the index showed factory activity slowing for a second straight month in August, the contraction was less than expected and provided some relief to investors who were bracing for a much worse result," MF Global analyst Edward Meir said in a note.

Readings below 50 indicate contraction.

The report added to a positive outlook for metals demand from the world's top consumer, analysts with Commerzbank said in a note, building on upbeat sentiment after Monday's release of data showing an 8.8% increase in the country's refined copper imports last month.

Euro-zone purchasing managers also held a brighter than expected outlook this month, according to a report Tuesday, with the currency area's composite PMI at 51.1 in August, better than forecast for a reading of 50.0.

Copper is sensitive to the economic outlook because of its widespread uses in construction and manufacturing. The metal is found in electrical wiring and plumbing, cars and trucks and consumer electronics, among other applications.

Futures came under pressure beginning in late-July from signs of a slowdown in global growth, sliding from just below $4.50 a pound to below $3.90 a pound earlier this month as traders reassessed their view of likely copper demand.