METALS-Copper rises on global economic hopes after solid US data

* Commodity prices have upside potential -Credit Suisse

* European equities touch 4-1/2-yr high, dollar near 7-month peak

* U.S. weekly jobless claims fall 10,000; 4-week average lowest in 5 yrs

LONDON, March 14 (Reuters) - Copper rose on Thursday as risk appetite improved after solid U.S. retail sales and jobs data, but a strong dollar and Chinese consumers' reluctance to buy the metal because of ample domestic supplies curbed gains. Three-month copper on the London Metal Exchange added 0.3 percent to $7,808 a tonne by 1453 GMT, reversing small losses seen earlier in the session. 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. LME copper prices hit their highest since Feb. 28 at $7,883 a tonne on Tuesday but are down almost 7 percent from the year's peak near $8,350 touched early last month, and also down on the year. "Metals have already incorporated a lot of bad news out of China. In my view March and April data will be much better," Gianclaudio Torlizzi, a partner at metals consultancy T-Commodity said. "The quarterly view is quite bullish and this explains why the market now is in a tug of war between institutional players and daily traders. It's building a support for a future pop up." In the U.S., the number of people filing new claims for unemployment benefits dropped for a third straight week last week, the latest indication the labour market recovery is gaining traction. "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 8 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, which is used widely in infrastructure and power cables. "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." High copper stocks have weighed on the market with LME copper inventories doubling since early December. Bonded copper stocks in China warehouses are not far from record highs, while copper inventories in warehouses monitored by the ShFE rose 8.9 percent to a near one-year high at the start of the month.

MORE PRESSURE ON ALUMINIUM European shares hit a 4-1/2-year high and the dollar hovered close to a seven-month peak on Thursday, as the strong U.S. retail sales figures helped bolster hopes of a global economic recovery. The U.S. Dow Jones Industrial average was due to extend its winning streak to 10 days. "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." The strong dollar, however, put a cap on gains in metals on Thursday as it makes dollar-priced commodities more expensive for holders of other currencies. Aluminium was one of the top gainers after news on Wednesday that China's State Reserves Bureau (SRB) has issued long-awaited tenders to buy 300,000 tonnes of primary aluminium. The SRB buying would only have a temporary impact on prices, however, and would not change the dynamics of Chinese overproduction that has weighed on the market, analyst Max Layton at Goldman Sachs said. "Looking forward, sharp growth in low-cost supply is expected to continue as it is still profitable at current low prices, likely keeping the Chinese market under pressure unless more high cost producers shut capacity and/or exports increase," he said in a note. Three-month aluminium rose 0.6 percent to $1,977 a tonne. It has shed 9 percent since touching a high of $2,174 on Feb. 15. Zinc and lead were barely changed. Zinc added $1.00 to $1,983 a tonne and lead inched up $1.25 to $2,252.25. Nickel was the best performer, gaining 1.0 percent to $17,105 a tonne and tin rose 0.3 percent to $24,010.

Metal Prices at 1459 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal Last Change Pct Move End 2012 Ytd Pct

move

COMEX Cu 352.75 1.30 +0.37 365.25 -3.42 LME Alum 1976.25 -5.75 -0.29 2073.00 -4.67 LME Cu 7801.00 -29.00 -0.37 7931.00 -1.64 LME Lead 2252.50 1.50 +0.07 2330.00 -3.33 LME Nickel 17116.00 86.00 +0.50 17060.00 0.33 LME Tin 23975.00 25.00 +0.10 23400.00 2.46 LME Zinc 1984.25 2.25 +0.11 2080.00 -4.60 SHFE Alu 14780.00 -25.00 -0.17 15435.00 -4.24 SHFE Cu* 56810.00 -110.00 -0.19 57690.00 -1.53 SHFE Zin 15195.00 0.00 +0.00 15625.00 -2.75 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN

SHFE ZN began trading on 26/3/07