METALS-Copper ends up on strong manufacturing data

• Copper inventories drop, aluminum stocks rise again* Dollar weakness spurs risk appetite after U.S. data(Changes headline, recasts, updates with New York closing copper prices, adds NEW YORK to dateline and analyst comments)NEW YORK/LONDON, May 28 - Copper closed higher on Thursday after strong manufacturing data signaled the economy was stabilizing, which encouraged investors to take on more risky assets such as industrial metals rather than safe havens such as the dollar.Copper for July delivery on the New York Mercantile Exchange's COMEX division rose 1.60 cents to close at $2.1370 a lb, after dealing between $2.0790 and $2.1645, a new high for the benchmark contract dating back to May 8.On the London Metal Exchange (LME), copper for three-months delivery ended up $95 at $4,755 a tonne."The durable goods orders are very volatile normally, but better than expected is better than expected," said Bart Melek, Global Commodity Strategist with BMO Nesbitt Burns in Toronto. "We have also had the U.S. dollar weaken a touch to $1.39 versus the euro, and that's a positive driver for the copper."The U.S. dollar slipped against the euro after the U.S. Commerce Department reported new orders for durable goods rose 1.9 percent from March, the biggest percentage advance since December 2007.Separate reports showing sales of new U.S. single-family homes rose slightly in April and fewer workers filed for first-time jobless aid last week added to recent optimism that the worst of the deep economic recession was likely over."Overall on the economic side, recent data confirming that the U.S. housing data is stabilizing and the much-better-than-expected confidence numbers out the U.S. have fortified the view on copper that demand will improve," Melek said.But some analysts said copper faced weakness in coming months as supportive buying from China tails off and ahead of a seasonally quiet market period."The buying spree that China went on in the first half of the year is going to be very difficult to sustain because it was largely fueled by restocking, which is a finite process," said Gayle Berry, metals analyst at Barclays Capital in London.Elsewhere, many markets across North Asia were on holiday, including the Shanghai Futures Exchange.COPPER STOCKS DROP, AGAINCopper inventories data was supportive. Stocks of copper at LME warehouses dropped by 2,150 tonnes to 317,125 tonnes. Canceled warrants stood at 43,650 from 43,375 tonnes.Aluminum closed at $1,412 from $1,405.The relentless rise in LME stocks continued, jumping 16,550 tonnes to a new record above 4.2 million tonnes.Used in transport and packaging, aluminum has come under pressure in recent months on downbeat data from auto makers. It earlier hit $1,383, its lowest level since early April.Underlining the uncertainty over aluminum demand from the embattled automobile sector, General Motors Corp and the U.S. Treasury made an improved equity exchange offer to bondholders.Aluminum canceled warrants were at 52,700 from 50,250 tonnes on May 26.Battery material lead closed at $1,478 from $1,445. Tin ended at $13,650 from $13,600. Lead and tin supply worries remain due to a dominant position controlling between 50 and 80 percent of cash warrants on LME stocks.Zinc ended at $1,475 from $1,460, while steel making ingredient nickel closed at $13,500 from $13,395. On Wednesday prices touched $13,900 but failed to crack resistance between $13,500 to $14,000 -- the top of the trading channel since late October.Nickel stocks rose 1,218 tonnes to 109,860 tonnes.LME nickel stocks have fallen sharply since late April, when they reached above 114,400 tonnes. In April, Chinese nickel imports hit a monthly record of 21,031 tonnes.Analysts said nickel has recently been supported by a slow trickle of restocking by Chinese steel mills, although speculative stockbuilding could also be a factor."While medium- to longer-term technical studies continue to improve with a major bottoming pattern appearing to be under construction, prices remain firmly range bound for the time being," brokerage Newedge said in a note.

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