Copper reverses loss, up 0.2 pct as oil trims gains

* Copper higher in London and Shanghai as oil trims rally

 * Copper capped near-term by worries about oversupply in
China

 * Coming Up: US Fed Beige book; 1900 GMT

 By Nick Trevethan	

 SINGAPORE, March 2 (Reuters) - London copper rose Wednesday
as oil prices pared gains, easing concern about the impact on
global growth prospects.	

 Three-month copper on the London Metal Exchange rose
$15 to $9,875 a tonne by 0719 GMT, having recovered from
$9786.25 earlier. Shanghai's most active copper contract
 ended higher too, up 1 percent at 74,700 yuan.	

 "We saw the Chinese come into the market late in the day.
There was no particular conviction or reason for this, beyond
the slight moderation in crude prices. Volume hasn't been too
bad, but it was a messy kind of day," a trader in Singapore
said.	

 Some 4,000 lots of LME copper traded by the time Shanghai
closed, a little higher than typical for the time of day.	

 In the medium term, high oil prices after reports protesters
in Iran clashed with security forces, adding to the already
turbulent atmosphere in the Middle East and North Africa, and
slowing Chinese growth, were expected to keep copper in check in
the near term. 	

 "There is further short-term weakness in copper. There are
two sources of fundamental weakness. The first is scrap supply,
where the best indicator is spot treatment and refining charges 
where we are not seeing signs of falling," said Alan Heap,
analyst at Citigroup.	

 "The other bear point is that there is plenty of inventory
in bonded warehouses and in other unreported locations. It's
important to know who has this stock and what their game plan
is. One thing is clear; it's not in the hands of fabricators."	

 Heap noted that the market's performance would depend on
where fabricators went to restock -- to the Shanghai Futures
Exchange, through imported bonded warehouse stocks held by
merchants, or from other metal held by speculators away from the
exchange.	

 Brent crude oil pared early gains to above $116 a barrel on
Wednesday trade 0.2 percent higher at $115.61 after rallying as
much as $5 in the previous session as protests across North
Africa and the Middle East stirred concerns about supplies from
top Gulf OPEC producers.  	

 Copper saw a late blip higher Tuesday after U.S. Federal
Reserve Chairman Ben Bernanke said downside risks to growth had
diminished. 	

 "There is a lot of near-term pressure on copper at the
moment and most of it is negative. The technical picture is
weak, high prices are a real concern, and yes, Bernanke's
comments were a bit of a fillip, but it's temporary," said a
trader in Hong Kong.	

 "There are worries about China -- unfounded I think. China
needs to grow and will continue to expand just below 10 percent.
That will draw in commodities in the longer term and support
prices. Copper today at $9,800 is probably overpriced. Ask me
that in six months and I'll say it is steal of a deal."	

 In other metals, nickel rose $75 to $28,850.	

 "Our bullish view on nickel is our most non-consensus call,"
Citi's Heap said.	

 "The reason is the market is assuming the pressure acid
leach projects in the pipeline will come in on time and on cost.
We take a different view."	

 He noted previous pressure acid leach projects had some in
well behind schedule and had taken years to reach capacity.	

 "If things go according to the producers' plans that market
in 2014 will be in surplus by 200,000 tonnes. If they don't,
that theoretically could become a deficit of 200,000," he said.	

 "However, we are looking at a 30,000 tonne deficit as the
gap will be filled by additional nickel pig iron output, demand
destruction and increased output from other producers."	

 Aluminium fell $11 to $2,599. 	

 China will produce 20 million tonnes of aluminium in 2011,
with capacity of 25 million tonnes according to estimates from
China Non-ferrous Metals Association. 	

 That was about 1 million tonnes more than Aluminum Corp of
China Ltd    , predicted on Tuesday.	

  	
 Base metals prices at 0709 GMT
 Metal              Last       Change   Pct Move YTD pct chg
 LME Cu            9875.00     15.00     +0.15      2.86
 SHFE CU FUT MAY1    74700       700     +0.95      3.97
 LME Alum          2599.00    -11.00     -0.42      5.22
 SHFE AL FUT MAY1    16990        00     +0.00      0.89
 HG COPPER MAY1     449.30     -1.45     -0.37      1.21
 LME Zinc          2503.00    -12.00     -0.48      2.00
 SHFE ZN FUT MAY1    19235       -80     -0.41     -1.23
 LME Nickel       28850.00     75.00     +0.26     16.57
 LME Lead          2550.00     -5.00     -0.20      0.00
 LME Tin          32250.00     50.00     +0.16     19.89
 LME/Shanghai arb^          1239
 Dollar/yuan          6.5727 \ 6.5728
 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/idAFL3E7E205120110302)