Copper gains, but headed for biggest weekly loss since August

* Copper gains, still on track for weakest week since August

 * Oil jitters sap near-term outlook for metals; nickel seen
top pick

 * Coming Up: U.S. preliminary Q4 GDP; 1330 GMT

 (Updates prices)	

 By Nick Trevethan	

 SINGAPORE, Feb 25 (Reuters) - London copper rose 0.9 percent
on Friday, but remained on course for its biggest weekly loss
since August 2010, fuelled by worries that runaway oil prices
resulting from the turmoil in North Africa will constrain global
growth.	

 Three-month copper on the London Metal Exchange rose
$84 to $9,589 a tonne by 0703 GMT, after having touched $9,311,
a near one-month low, in the previous session.	

 Prices recovered from those lows, struck when oil surged
almost 8 percent in just a couple of hours on worries about
supply from North Africa, after Saudi Arabia reassured the world
it would meet any supply shortfalls, lifting copper.	

 "The market is undergoing a period of some correction. The
events in the Middle East and North Africa are spilling over
into metals and people are paring back their forecasts for
demand as a result," said Barclay Capital analyst Yingxi Yu.	

 But Brent oil failed to hold onto a rapid spike to
2-1/2-year highs near $120 a barrel on Thursday in a late-day
rout, dragged down by Saudi Arabia's assurances it could counter
Libyan supply disruptions. Benchmark Brent rose almost
$2 to $113.32 a barrel on Friday. 	

 Worries about slower growth stemming from high energy costs
have toppled copper from a record high of $10,190 last week, and
have dragged prices down 2.8 percent this week, their biggest
such drop since July last year.	

 The cash threes spread MCU0-3 moved into backwardation
after flipping into contango on Wednesday. But cash prices are
only about $5 above the benchmark, versus more than $50 in mid
January.	

 The rising trend in stocks in the LME, and estimates that
600,000 to 800,000 tonnes of material may have built up in
warehouses in the city of Shanghai are likely to delay the
return of Chinese buyers to the international market with
estimates for China to take a few months to chew through that
metal, delaying sustained profitable arbitrage trade until later
in the second quarter.	

 "There is no shortage of copper in China for the time being.
The contango is wide -- around $100 between the first and third
months, and I don't think we will see much restocking by China
until well into the second quarter, maybe even the third." a
trader in Hong Kong said.	

 Shanghai's most active May copper contract rose 1.6
percent to 72,590 yuan.	

 Nickel rallied 0.6 percent and at $27,675, is up 12
on the year, the second strongest performer of the year after
tin.	

 "The only metal that has been gathering more interest is
nickel," Yu said. "Production issues at Vale, falling stocks and
strong China imports and rising premiums all help keep market
sentiment relatively well supported."	

  Brazilian miner Vale  said on Friday it
will lose around 5 percent of its total 2011 nickel production
due to a 16-week shutdown of a smelter furnace in Canada.
 	
 Base metals prices at 0704 GMT
 Metal              Last       Change   Pct Move YTD pct chg
 LME Cu            9589.00     84.00     +0.88     -0.11
 SHFE CU FUT MAY1    72590      1170     +1.64      1.03
 LME Alum          2544.25      2.25     +0.09      3.01
 SHFE AL FUT MAY1    17095        40     +0.23      1.51
 HG COPPER MAR1     435.60      2.95     +0.68     -1.88
 LME Zinc          2472.25     -0.75     -0.03      0.74
 SHFE ZN FUT MAY1    19250       110     +0.57     -1.16
 LME Nickel       27675.00    170.00     +0.62     11.82
 LME Lead          2494.00     -6.00     -0.24     -2.20
 LME Tin          31395.00   -205.00     -0.65     16.71
 LME/Shanghai arb^          1185
 Dollar/yuan          6.5758 \ 6.5763
 Shanghai and COMEX contracts show most
  active months
 ^ LME 3-m copper in yuan, including 17 pct  VAT, minus SHFE  third  month

(Source: http://af.reuters.com/article/metalsNews/idAFL3E7DP0HX20110225)