Chinese PMI data boosts copper prices
* Market looking ahead to US manufacturing data

Copper prices rose on Wednesday as stronger Chinese manufacturing data helped lift sentiment, but gains are expected to be capped by a seasonal lull in demand.

Benchmark copper on the London Metal Exchange was trading at $5,075 a tonne at 1034 GMT, from a close of $4,970 on Tuesday.

CLSA's China Purchasing Managers' Index (PMI) rose in June to 51.8 from 51.2 in May, showing further expansion in the country's manufacturing sector. China is the world's largest consumer of industrial metals.

"The Chinese PMI has helped, everyone is looking to China to remain a positive factor but we are talking about a market slowing as we go into the summer period," said Alex Heath, head of base metals trading at RBC Capital Markets.

Copper, used in power and construction, fell on Tuesday as investors adjusted their positions ahead of the end of the quarter and markets fretted that prices had risen too far in the face of weak fundamentals.

The market is waiting for the June Institute for Supply Mangement's survey of manufacturing in the United States, the world's largest economy.

Also a plus for prices are falling stocks of copper in LME warehouses, which at around 266,000 tonnes compare with levels around 500,000 tonnes in early April.

LME copper has gained about 60 percent in the first half of this year, driven primarily by Chinese buying for stockpiles.

"Rising investment sentiment, (a) possible record increase in bank lending in China and speculation that Chinese copper demand will offset deterioration in the rest of the world supports copper prices," said investment bank Fairfax in a note.

HELD TIGHTLY

In other metals, aluminium was up at $1,640 a tonne from a close of $1,630 on Tuesday.

Inventories held in LME warehouses fell by 3,525 tonnes but remained near record levels near 4.4 million tonnes.

The long-term demand outlook for aluminium, used in transport and packaging, remains grim because of the turmoil in the auto industry and record stock levels.

Tin rose to $14,450 a tonne against $14,150 at the close on Tuesday.

Worries about supplies have have pushed the premium for cash material over the three-month contract to around $82 a tonne from a discount of around $40 a tonnes in the middle of June.

"Tin is not fundamentally tight but the feeling in the market is it is held tightly," said BaseMetals.com analyst William Adams. He was referring to dominant holdings of tin stocks in LME warehouses earlier this year.

Elsewhere, zinc was at $1,571 a tonne from $1,545, battery material lead was at $1,709 against $1,690, and steel-making ingredient nickel was at $15,660 from $15,350.

Metal Prices at 1039 GMT Metal Last Change Percent Move End 2008 Ytd Percent

move COMEX Cu 230.05 4.25 +1.88 139.50 64.91 LME Alum 1635.00 5.00 +0.31 1535.00 6.51 LME Cu 5072.00 102.00 +2.05 3060.00 65.75 LME Lead 1700.00 10.00 +0.59 999.00 70.17 LME Nickel 15610.00 260.00 +1.69 11700.00 33.42 LME Tin 14150.00 -600.00 -4.07 10700.00 32.24 LME Zinc 1565.00 20.00 +1.29 1208.00 29.55 SHFE Alu 13420.00 -15.00 -0.11 11540.00 16.29 SHFE Cu* 40340.00 -470.00 -1.15 23840.00 69.21 SHFE Zin 13400.00 -20.00 -0.15 10120.00 32.41 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07