LONDON, Jan 18 (Reuters) - Copper rose on Friday and was on track to close the week with small gains, bolstered by better-than-expected fourth quarter growth in top consumer China's economy, but concerns about U.S. debt and supply surpluses kept gains in check.
China's economy grew at a slightly faster-than-expected 7.9 percent in the fourth quarter of 2012, the latest sign it is pulling out of a post-global financial crisis slowdown that produced its weakest year of economic growth since 1999.
Other data released alongside gross domestic product showed industrial output grew 10.3 percent in December from a year ago, versus expectations of 10.1 percent. Retail sales in December rose 15.2 percent on a year ago versus an estimated 14.9 percent in a Reuters poll.
Three-month copper on the London Metal Exchange closed at $8,061 a tonne from $8,054 on Thursday.
"The two key points for 2013 are the seasonal restocking in China (which) kicks off after the Chinese New Year - that will likely support prices above $8,000 a tonne in the first quarter," said UBS commodity and mining analyst Angus Staines.
"But after that we're going to see a return to fundamentals and for copper that means an oversupplied market."
The China data out earlier followed more evidence on Thursday that the U.S. economy remained on track, with weekly U.S. unemployment claims at five year-lows and a surge in residential construction in December.
But worries about U.S. debt persist, with squabbling in Washington raising the chances that the U.S. may be forced to delay debt payments. The treasury hit its $16.4 trillion debt ceiling on New Year's Eve, and will run short of funds as early as mid-February.
U.S. consumer sentiment unexpectedly deteriorated for a second straight month to its lowest in over a year in January, with many consumers citing the recent debt-ceiling debate in Washington.
Also keeping copper's gains in check, stocks of the metal monitored by the Shanghai Futures Exchange inched down 0.3 percent from last week to 208,568 tonnes, but remained near their highest since April last year.
Stocks of copper in warehouses monitored by the LME are also near their highest levels in about a year, latest data showed.
Copper hit 2-1/2 month highs in early January, but has since struggled to regain momentum.
"The macro picture both out of the United States and China look good for metals," said analyst Ed Meir of INTL FC Stone in New York.
"Still, as we get into February, the focus will then revert to what is going on in the United States. If they don't raise the debt ceiling it's going to be a mess. Expect more of the same - (copper prices) muddling along," he added.
In the physical markets, traders in Asia said business was quiet ahead of the Lunar New Year holiday next month.
LME nickel, the worst performing metal in the complex last year, closed at $17,550 from $17,600. LME stocks of the metal edged up another 576 tonnes to 147,804 tonnes, near the highest levels in almost three years.
Tin closed at $25,025 a tonne from $24,920, zinc at $2,034 a tonne from $2,010, lead at $2,301 from $2,285 and aluminium at $2,044 from $2,048.50.
Metal Prices at 1704 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2012 Ytd Pct
COMEX Cu 366.15 0.80 +0.22 365.25 0.25
LME Alum 2046.25 -2.25 -0.11 2073.00 -1.29
LME Cu 8071.25 17.25 +0.21 7931.00 1.77
LME Lead 2301.50 16.50 +0.72 2330.00 -1.22
LME Nickel 17552.00 -48.00 -0.27 17060.00 2.88
LME Tin 24895.00 -25.00 -0.10 23400.00 6.39
LME Zinc 2033.50 23.50 +1.17 2080.00 -2.24
SHFE Alu 15285.00 45.00 +0.30 15435.00 -0.97
SHFE Cu* 58380.00 640.00 +1.11 57690.00 1.20
SHFE Zin 15420.00 155.00 +1.02 15625.00 -1.31
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07