Copper (HG-FT232.152.000.87%) steadied on Friday as investors digested a recent mixed bag of data and weighed expectations of economic recovery against weak fundamentals. Copper for three-month delivery on the London Metal Exchange was at $5,125 (U.S.) a tonne by 0940 GMT from a close of $5,130 on Thursday. It traded between a range of $5,062 and $5,130, having earlier flirted with a one-week high. An aggressive buying exercise from China, the world's top copper consumer, has helped prices of the metal rise by more than 66 per cent so far this year. But analysts warn this floor is falling away as China winds down its restocking process. “We're going to pull back, we've run ahead of ourselves a little bit,” said Andrey Kryuchenkov, an analyst at VTB Capital. A traditionally slower demand season in China in the next two months will likely add further pressure to prices. “We could have another push on copper if Chinese buying comes back in the fourth quarter. You need Chinese buying to come again to help this market, because demand won't come yet from the United States or Europe,” he added “Copper is the king still, it's going to up, but for now we're going to sit here and wait. Hopefully China can use up those stocks quickly.” Sentiment in equities and industrial metals had perked up this week after encouraging U.S. data, including a better economic outlook from the OECD and data showing U.S. durable goods orders rose unexpectedly. “There's a lot of confusion in terms of reading the data and that's the reason why the equity and the commodities markets go up and down over the past 3-4 weeks,” said Bonnie Liu, analyst at Macquarie. Investors will eye U.S. personal income and consumption data for May due at 1230 GMT. Caution set in this week when the Federal Reserve said the economy would remain weak for a time. Adding to concerns on Friday that economic recovery was far from secured was data showing Japanese consumer prices fell at a record pace in the year to May. With the demand outlook remaining weak, analysts widely expect copper to come under pressure in the coming months. “As evidence of slower Chinese imports emerge we expect prices to come under further downward pressure, though downside potential is limited to the mid-$4,000s,” Barclays Capital said in a note. Among other industrial metals, aluminum (AL-FT0.77----%) , used in transport and packaging, was at $1,679 from $1,684. The metal is on track for its biggest monthly gain since May 1988. But the demand outlook remained grim as stocks of the metal soared 20,500 tonnes, to within spitting distance of a record high near 4.4 million tonnes. Inventories of the metal have risen almost consistently so far this year as the metal has been hammered by turmoil in the autos sector. Zinc was at $1,622 from $1,643 and battery material lead was at $1,744 from $1,738. Tin traded at $14,850 from $14,825 and nickel was at $15,800 from $15,625. In South Korea, Asia's third-largest buyer of base metals, the government has increased its 2009 reserve stockpiling plan on six major metals by 6.2 per cent to 199,800 tonnes because it expects prices to rebound sharply next year.

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