METALS-Copper edges up on China hope; US fiscal worries weigh
* LME, Shanghai copper head for biggest weekly rise since early Dec US fiscal talks resume on Friday as deadline nears
* Coming up: U.S. Chicago PMI, Dec; 1445 GMT
(Adds details; updates prices) SINGAPORE, Dec 28 (Reuters) - London copper inched up on Friday, on track for its biggest weekly rise in four weeks on signs that top consumer China's economy is improving, although worries about the U.S. "fiscal cliff" kept investors cautious. "Shanghai copper has been leading the gains this month thanks to renewed confidence after the leadership transition in Beijing," said Chen Dixi, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen. China's factory activity in December probably expanded at its fastest pace in eight months, reinforcing signs of a steady recovery in the world's second-largest economy. A Reuters survey showed that the official purchasing managers' index (PMI) in December, due at 0100 GMT on Jan. 1, may have hit 51.0 from November's 50.6. But Chen cautioned that the initial boom in copper demand may fade as Beijing is adamant about curbing speculative investment in the property sector and shifting the economy away from the resource-heavy pattern of development. "After all, China is trying to adjust the structure of its economy, and the global economic recovery is far from certain," Chen said. Three-month copper on the London Metal Exchange rose 0.4 percent to $7,946.50 a tonne by 0711 GMT, on course for a 1.5-percent weekly rise. It earlier hit a 1-1/2 week high of $7,955.25. The most-traded April copper contract on the Shanghai Futures Exchange closed up 0.2 percent at 57,680 yuan ($9,200) a tonne, gaining 1.8 percent for the week. Demand for physical copper remained tepid. The discount of spot copper to Shanghai front-month copper futures contract widened to 405 yuan a tonne, from 400 yuan on Thursday, the Shanghai Metals Market said on its website.(www.smm.cn) Investors still held out hopes that the White House and Republicans will reach an agreement to avert $600 billion worth of tax hikes and spending cuts in the new year, as the clock ticks towards the deadline. President Barack Obama will meet congressional leaders from both parties to try to revive the negotiation to avoid tipping the economy into another recession. In industry news, Indonesia will increase its minimum purity requirements for tin ingot exports next year, a trade ministry official said on Thursday, in its latest move to bolster its domestic processing industries. LME tin inched up 0.2 percent to $23,450, headed for a third straight weekly rise.
Base metals prices at 0711 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7946.50 31.50 +0.40 4.56 SHFE CU FUT APR3 57680 130 +0.23 4.19 HG COPPER MAR3 361.65 1.55 +0.43 5.25 LME Alum 2083.75 3.75 +0.18 3.16 SHFE AL FUT MAR3 15345 -05 -0.03 -3.16 LME Zinc 2093.50 -8.50 -0.40 13.47 SHFE ZN FUT MAR3 15545 -40 -0.26 5.07 LME Nickel 17271.00 -4.00 -0.02 -7.69 LME Lead 2330.25 -4.75 -0.20 14.51 SHFE PB FUT 15250.00 10.00 +0.07 -0.23 LME Tin 23450.00 50.00 +0.21 22.14 LME/Shanghai arb^ 356
Shanghai and COMEX contracts show most active months ($1 = 6.2360 Chinese yuan)
(Editing by Himani Sarkar)