METALS-Copper hits two-week high on imminent US fiscal deal
* U.S. House of Representatives approaches final vote on fiscal deal
* China Dec official PMI matches Nov's seven-month high
* LME copper may rise above $8,063/T - technicals
* Coming up: Euro zone Markit Mfg PMI, Dec; 0858 GMT
(Adds details, comments; updates details) SINGAPORE, Jan 2 (Reuters) - London copper hit a two-week high on Wednesday on hopes a U.S. deal to avert a fiscal crisis was just hours away, while upbeat China data indicating steady improvement in the world's top copper consumer also boosted prices. A bill to avert the U.S. "fiscal cliff" by cancelling most scheduled tax hikes and delaying spending cuts cleared a procedural vote in the U.S. House of Representatives by an overwhelming margin, indicating strong support for final passage in a vote expected later in the day. Three-month copper on the London Metal Exchange climbed to a two-week high of $8,059, but pared gains later. By 0314 GMT, it was trading at $8,045, up 1.5 percent - its biggest daily rise in more than a month. "Less tail risk in the U.S., China coming up with a cyclical bound, combined with a weaker dollar. Voila! There you have the higher prices," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. China's official manufacturing purchasing managers' index held steady in December at 50.6, matching November's seven-month high, adding to evidence that the world's second-largest economy was headed towards steady growth revival. Commodities priced in the dollar also got a boost as the greenback dropped to its lowest in nearly two weeks against a basket of currencies with investors losing interest in the safe-haven currency amid growing hopes the U.S. lawmakers would strike a deal. Technical analysis suggested that LME copper is expected to test resistance at $8,063, with a good chance of breaking this level and rising further to $8,140, said Reuters market analyst Wang Tao.
BULLISH OUTLOOK IN H1 Copper prices could further strengthen in the first half, buoyed by China's recovery, but the rally could run out of steam later as an increase in supply overshadows demand growth, analysts said. UBS Wealth Management expected copper to rise towards $9,000 in the first half of 2013, before weakening in the second half due to solid supply growth and less incremental demand. "If metals prices rally, it is probably not for a structural reason but a cyclical bound," said Schnider of UBS. "We would like to sell into metal rallies." LME copper stocks rose to 320,050 tonnes by Dec. 28, the highest level since early February. <MCUSTX-TOTAL> China's financial markets are closed for holiday, and will reopen on Friday, Jan. 4.
Base metals prices at 0314 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 8045.00 116.00 +1.46 1.46 SHFE CU FUT APR3 57860 180 +0.31 0.31 HG COPPER MAR3 366.35 1.10 +0.30 0.30 LME Alum 2091.00 20.00 +0.97 0.97 SHFE AL FUT MAR3 15365 20 +0.13 0.13 LME Zinc 2093.00 29.50 +1.43 1.43 SHFE ZN FUT MAR3 15520 -25 -0.16 -0.16 LME Nickel 17300.00 145.00 +0.85 0.85 LME Lead 2348.25 8.25 +0.35 0.35 SHFE PB FUT 15265.00 15.00 +0.10 0.10 LME Tin 23402.00 2.00 +0.01 0.01 LME/Shanghai arb^ 872
Shanghai and COMEX contracts show most active months
(Editing by Himani Sarkar)