* LME copper stocks continue to climb * Euro near 2011 highs vs dollar * Coming up: U.S. Q4 preliminary GDP 1330 GMT (Recasts, update prices, pvs Singapore) By Silvia Antonioli LONDON, Feb 25 (Reuters) - Copper edged up on Friday, as positive U.S. economic data supported market sentiment but concerns remained about further interest rates increases in China which may slow economic growth and hit metals demand. Three-month copper on the London Metal Exchange rose to $9,605 a tonne by 1104 GMT from $9,505 at the close on Thursday, after having touched $9,311, a near one-month low, in the previous session. "It looks like better than expected jobless data from the U.S. boosted market sentiment," said Numis Securities analyst Cailey Barker, adding that the data suggested the world's largest economy is doing better than previously thought and this improved the outlook for base metals demand. On Thursday, data showed that U.S. jobless claims fell more than expected last week, in a sign the labour market was gradually improving. The weaker dollar also helped copper prices, with the euro hovering aruond 2011 highs against the U.S. currency. But increasing inflation and possible interest rates rise in China and other emerging economies continued to worry investors, analysts said. "The main concern is that China does not grow as much as expected and therefore the demand for metals grows less than expected," Barker said. "Certainly they are taking some austerity measures." Also, talk that Chinese market players are holding high inventories have weakened the short-term outlook for copper. "Stocks on the LME and inventories held in China have been rising for some time," VTB Capital analyst Andrey Kryuchenkov said. "We expect that demand in China will pick up. Maybe in March or in the second quarter we will see a stocks drop," he said, adding that demand for copper usually increases in the spring as construction picks. China's imports of refined copper are likely to fall in February because the Lunar New Year holidays cut arrivals, after a 7.4 percent rise in January supported by fabricator restocking. Investors will watch out for more U.S. data when U.S. preliminary GDP for the fourth quarter is released at 1330 GMT. NARROW BACKWARDATION Inventories of copper on the London Metal Exchange continued to climb and reached 416,825 tonnes from about 258,000 tonnes in December, data released on Friday showed. The abundance of material available in the short term narrowed the copper backwardation premium for cash copper over three-month material to $2.5 on Friday from a peak of $70 in mid December. Copper had moved into a $3.5 contango -- the discount for cash over three-month material -- on Thursday. "Open interest on the LME started to fall as soon as copper prices started to come off in mid February," Kryuchenkov said. Aluminium stocks fell 4,625 tonnes to 4,610,875 but remained within reach of a record high at 4,640,750 tonnes hit in January last year. Aluminium was at $2,545 from $2,542. Tin was flat at $31,600 while zinc, used in galvanizing, was $2,467.5 from $2,473 at the close on Thursday. Battery material lead was at $2,477.5 from $2,500 and nickel was at $27,799 from $27,505. Metal Prices at 1059 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2010 Ytd Percent move COMEX Cu 436.00 2.45 +0.57 444.70 -1.96 LME Alum 2540.00 -2.00 -0.08 2470.00 2.83 LME Cu 9501.00 -4.00 -0.04 9600.00 -1.03 LME Lead 2499.00 -1.00 -0.04 2550.00 -2.00 LME Nickel 27505.00 0.00 +0.00 24750.00 11.13 LME Tin 31645.00 45.00 +0.14 26900.00 17.64 LME Zinc 2473.00 0.00 +0.00 2454.00 0.77 SHFE Alu 17095.00 40.00 +0.23 16840.00 1.51 SHFE Cu* 72590.00 1170.00 +1.64 71850.00 1.03 SHFE Zin 19250.00 110.00 +0.57 19475.00 -1.16 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Sue Thomas)

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