METALS-Copper gains after China GDP, but caution limits rise
* China GDP grows 7.8 pct in Q3, matching forecast
* LME copper on track for modest weekly gain
SINGAPORE, Oct 18 (Reuters) - London copper futures edged up on Friday, supported by data showing China's economy grew as forecast in the third quarter, although concerns its upward momentum may be short-lived limited price gains.
China's economy grew 7.8 percent in July-September, its fastest pace this year, as firmer foreign and domestic demand lifted factory production and retail sales. The country is the top consumer of copper, accounting for 40 percent of global use of the metal.
But the outlook going forward is not as rosy amid volatile global demand and Beijing's reforms aimed at more sustainable growth, analysts say.
Three-month copper on the London Metal Exchange rose 0.2 percent to $7,241 a tonne by 0335 GMT. The metal has traded in a tight range of $7,139-$7,300 this week, and is up 0.6 percent for the week so far.
"The strong GDP number implies solid and growing demand for copper," said Helen Lau, senior metals analyst at UOB Kay Hian Securities in Hong Kong.
"But I haven't really changed my bearish view for 2014 and 2015 because we expect China's industrial production growth to slow as the growth becomes less investment-driven."
After three decades of expansion fuelled by exports and investment, Beijing is trying to shift the economic mix so that activity is geared much more towards consumption. That means a slowdown from the double-digit growth of previous years.
China's copper imports jumped 18 percent from August to hit an 18-month high in September as end-users rebuilt inventories, although analysts said the chances of the momentum being sustained may be slim as recent improvements in the economy could fade.
Copper could average $6,825 in 2014 compared to a projected $7,304 this year, said Lau of UOB Kay Hian.
The most-traded January copper contract on the Shanghai Futures Exchange was nearly flat at 52,120 yuan ($8,500) a tonne.
Concern over the impact of the 16-day shutdown on the U.S. economy has also weighed on investor sentiment, trapping prices in narrow ranges.
U.S. federal agencies resumed operations on Thursday after lawmakers passed legislation to sustain funding as well as prevent a debt default. But economists had warned that the shutdown chipped away 0.1 percentage point each week from fourth-quarter gross domestic product.
"The damage to the (U.S.) economy is real," INTL FCStone analyst Edward Meir said in a note.
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