Copper firmed on Tuesday as U.S. and Chinese economic data hinted at economic recovery, but immediate demand was less clear as investors weighed falling inventories with a decline in material tagged for delivery. Copper for delivery in three months on the London Metal Exchange MCU3 last traded at $4,635/4,637 in official rings from $4,600 on Friday. The metal used in power and construction earlier touched a day's high of $4,750, its strongest since the middle of April, as prices caught up with Shanghai gains after a three-day weekend. Adding some support, copper stocks at LME warehouses fell 3,775 tonnes to 394,925 tonnes. But cancelled warrants -- material tagged for delivery -- dropped to 79,450 tonnes, down from 83,100 tonnes at the end of last week. An rise in cancelled warrants so far this year has given copper prices a big boost. "We had decent economic data...(But) the number of cancelled warrants has slowed. It's not been as supportive as previous inventory data," Standard Bank analyst Leon Westgate said. The market widely believes this year's rise in material tagged for delivery -- increasingly in European warehouses -- has reflected metal destined for China, the world's biggest copper consumer. But analysts voice doubts about the sustainability of the recent surge in Chinese demand that helped spur copper more than 30 percent higher in the first quarter. "Chinese influence has been key to short-term copper gains, but analysts believe those supportive factors will not last," UBS said in a note. "China's State Reserve Bureau was widely thought to be buying copper, with many traders viewing those purchases as an inventory shuffle and that it would land back in the market." SUPPORTIVE DATA Data underpinned upside in the market. Pending sales of previously owned U.S. homes rose for a second straight month in March, while construction spending edged higher, suggesting moderation in the long housing slump. That fed into the positive sentiment generated by a survey of Chinese manufacturing that provided new evidence the massive fiscal and monetary stimulus is reviving the world's third-largest economy. [ID:nOSL010182] [ID:nN04391664] Among other industrial metals, aluminium MAL3 traded at $1,516 a tonne from $1,537 on Friday, discouraged by yet another record high in stocks at LME warehouses, which climbed 4,825 tonnes to 3,797,125 tonnes. Nickel MNI3 was quoted at $12,020/12,025 from $11,900. The market has been battered by a collapse in stainless demand, but the world's biggest stainless steel producer, Acerinox (ACX.MC), said on Monday it saw the market recovering in the third quarter after poor sales and weak prices pushed the Spanish firm into a first-quarter loss. [ID:nL167732] Zinc MZN3 stood at $1,526.5 a tonne from $1,510. The metal jumped more than 6 percent on Friday in a broad industrial metals rally inspired by data suggesting some stabilization in the U.S. factory sector. Tin MSN3 was $12,505 from $12,350, hitting its highest since early December, while battery material lead MPB3 was $1,430 a tonne from $1,400.

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