MARKETS-METALS (UPDATE 4) * China data possibly more important than U.S. for metals * Aluminium cash to 3-month contango narrows to about $1/T * COMING UP: U.S. weekly jobless claims (Adds official prices) By Pratima Desai LONDON, Aug 19 (Reuters) - Copper rose to a two-week high on Thursday as traders priced in growing appetite for assets perceived to be risky, but lingering concerns about demand are expected to cap gains. In the aluminium market, traders were watching significant long positions, holding 30 to 40 percent of warrants on London Metal Exchange stocks and cash contracts. Benchmark copper on the LME traded at $7,461 a tonne in official rings from $7,390 a tonne at the close on Wednesday. The metal used in power and construction earlier touched $7,496 a tonne, its highest since Aug. 5. Investors in recent days have been more positive about prospects for industrial metals but traders say buying has been sporadic and not as strong as it was earlier this year. "There is a more positive risk tone, but economic data remains choppy," said Daniel Major, analyst at RBS. "In most regions you can find good data and bad data ... I think there will be more support in the fourth quarter." The current quarter is seasonally slack for metals demand as activity slows in construction, particularly in China. China is the world's largest consumer of copper, accounting for more than 30 percent of the market estimated at about 19 million tonnes this year. Despite attempts by the country's government to slow growth and rein in price pressures, expectations are for strong growth and industrial metal demand from China. "Chinese economic data are becoming very important for metals, more so than U.S. data," a metals trader said. Later on Thursday the market sees U.S. weekly jobless claims at 1230 GMT and the Philadelphia Federal Reserve Bank's August business activity survey. CONTANGO Three-months aluminium traded at $2,103 a tonne in official rings from $2,107 on Wednesday. Worries about supplies because of large holdings by two entities have narrowed the discount for cash material against the three-month contract to around $1 a tonne, a level last seen in 2007, from levels near $30 a tonne in June. Also unusual is the premium for material for delivery tomorrow against material for delivery on Monday, known as tom/next and often used as way to lend metal to cover short positions. Tom/next aluminiun is trading at a premium or backwardation around $6 a tonne. On Wednesday the range was flat to $9 a tonne. These are the highest levels since early 2007. This backwardation is expected to attract metal to LME warehouses, despite a 5,100 tonne fall to 4.464 million tonnes as of Wednesday. On Monday and Tuesday more than 91,000 tonnes were delivered to LME warehouses. "Should stock-building continue, the price of aluminium should come under more pressure," Commerzbank said in a note. "We expect prices of below $2,000 a tonne in the near term already." But others expect financing deals to release cash for producers and earn banks higher returns than they would get in money markets and anticipate plans for physically backed aluminium exchange traded products will help support aluminium prices. Traders were also watching other large holdings of LME stock warrants and cash contracts on aluminium alloy, North American aluminium alloy, nickel, lead and tin. Zinc was untraded in the rings, but bid at $2,128 a tonne from $2,135 on Wednesday, lead traded at $2,145 a tonne from $2,122,50, tin was bid at $21,350 from $21,000 and nickel traded at $22,250 from $21,900. Metal Prices at 1211 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 337.60 2.65 +0.79 334.65 0.88 LME Alum 2095.00 -12.00 -0.57 2230.00 -6.05 LME Cu 7460.00 70.00 +0.95 7375.00 1.15 LME Lead 2129.00 6.50 +0.31 2432.00 -12.46 LME Nickel 22155.00 255.00 +1.16 18525.00 19.60 LME Tin 21300.00 300.00 +1.43 16950.00 25.66 LME Zinc 2128.00 -7.00 -0.33 2560.00 -16.88 SHFE Alu 15510.00 10.00 +0.06 17160.00 -9.62 SHFE Cu* 58260.00 220.00 +0.38 59900.00 -2.74 SHFE Zin 17580.00 140.00 +0.80 21195.00 -17.06 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Pratima Desai; editing by Anthony Barker)

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