METALS-Copper edges up on rising risk appetite after solid retail sales
* Commodity prices have upside potential, given recovery signs -Credit Suisse
* China's domestic oversupply of copper widens equity correlation
* Coming Up: U.S. weekly jobless claims ; 1230 GMT
(Adds analyst, trader quotes, updates prices) SINGAPORE, March 14 (Reuters) - London copper rose on Thursday, as risk appetite improved early in European hours following solid U.S. retail sales data, but Chinese consumers were sidelined on ample domestic supply, curbing upside momentum. Three-month copper on the London Metal Exchange edged up 0.33 percent to $7,810.50 a tonne by 0724 GMT, reversing small losses seen earlier in the session. Copper prices hit their highest since Feb. 28 at $7,883 a tonne on Tuesday but are down almost seven percent from the year's peak near $8,350 hit early last month and remain mired in negative territory for the year. The most-traded June copper contract on the Shanghai Futures Exchange fell 0.26 percent to close at 56,770 yuan ($9,100) a tonne. "It's steady as she goes for China's copper demand," said Thomas Lam, chief economist at DMG & Partners Securities in Hong Kong. DMG sees China's economy growing at just under eight percent this year, although Lam does not see its recently announced urbanisation policy igniting copper demand in the world's top consumer of the metal, keeping a lid on prices. "For China things have stabilised," he added. "I don't think near term policies are going to deviate significantly from the urbanisation plans they have already laid out." China plans to spend 40 trillion yuan ($6.4 trillion) to bring 400 million people to its cities over the next decade as the government tries to turn the country into a wealthy world power with economic growth generated by an affluent consumer class. European shares were likely to open higher on Thursday on positive sentiment following a better U.S. economic outlook, with investors focusing on more data that might help the market break out of its narrow trading band. U.S. retail sales expanded at their fastest in five months in February, the latest sign of momentum for an economy facing headwinds from higher taxes and pricier gasoline.
"Over the last few weeks, markets mainly focused on commodity-specific fundamentals, which still paint a rather cautious picture," Credit Suisse said in a note. "However, the focus is likely to shift back to the bigger economic picture. Given gradual improvements in economic activity, we think commodity prices have some recovery potential."
CHINA STOCKPILE WEDGE The rift between prices of industrial metals, especially copper, and equities has widened, reflecting commodities investors' dim view of the health of the global economy, an oversupply of raw materials and China's reluctance to buy them.
Bonded copper stocks in China warehouses are not far from record highs, while copper inventories in warehouses monitored start of the month.
PRICES Base metals prices at 0724 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 7810.50 25.50 +0.33 -1.49 SHFE CU FUT JUN3 56770 -150 -0.26 -1.58 HG COPPER MAY3 354.05 1.55 +0.44 -3.07 LME Alum 1975.00 10.00 +0.51 -4.64 SHFE AL FUT JUN3 14885 -15 -0.10 -3.00 LME Zinc 1993.00 11.00 +0.55 -3.42 SHFE ZN FUT JUN3 15280 -265 -1.70 -1.70 LME Nickel 17032.00 92.00 +0.54 -0.72 LME Lead 2258.00 7.00 +0.31 -3.50 SHFE PB FUT 14730.00 -50.00 -0.34 -3.41 LME Tin 24000.00 50.00 +0.21 2.56 LME/Shanghai arb^ -11
($1=6.2138 Chinese yuan)
(Reporting by Melanie Burton; Editing by Clarence Fernandez)