July 2 (Reuters) - London copper eased from its highest level in nearly four months on Wednesday as northern hemisphere summer holidays drained the market of direction, although an upbeat global manufacturing outlook and low exchange stocks underpinned prices.
"Overall demand is doing ok, still better than first quarter," said analyst Chunlan Li at CRU Group in Beijing.
"The macro seems very good, liquidity is easing, so that's also helping copper prices. We are expecting a higher average price in the third quarter."
China's factory activity hit multi-month highs in June, official and private surveys showed on Tuesday reinforcing signs that the world's second-largest economy is steadying as the government steps up policy support.
However, three-month copper on the London Metal Exchangeedged down 0.3 percent to $6,998 a tonne by 0240 GMT amid a lack of fresh drivers. It inched to its highest since March 7 at $7,028.50 a tonne in the previous session.
The most-traded September copper contract on the Shanghai Futures Exchangetraded flat at 50,170 yuan ($8,100) a tonne.
Reflecting greater demand for metal, premiums for copper in Shanghai bond climbed $5 on Tuesday to $110-$130 according to China price provider Shmet, suggesting appetite for financing has picked up after a probe into fraud at a Chinese port led banks to review their lending practices.
China is relaxing the rules used for calculating the amount of deposits that banks can re-lend as loans, an attempt hailed by some economists as the latest move to stimulate growth in its cooling economy.
Elsewhere, the outlook for metals demand was brightening after a string of factory reports on Tuesday.
Global manufacturing activity accelerated in June, and with new orders coming in faster output is likely to pick up in the coming months, a business survey showed on Tuesday.
U.S. manufacturing activity rose at a steady clip in June and automobile sales raced to their highest level in almost eight years, pointing to momentum in the economy after a turbulent start to the year.
Newmont Mining Corpsaid on Tuesday it had filed for international arbitration against the Indonesian government over a near six month-old mining dispute that has halted the U.S.-based firm's copper concentrate exports from the country.
A Chinese bank is suing a local government financing vehicle over a bad loan in a rare public display of a deepening rift between lenders and borrowers in China's murky $3 trillion local debt market.
"Overall demand is doing ok, still better than first quarter," said analyst Chunlan Li at CRU Group in Beijing.
"The macro seems very good, liquidity is easing, so that's also helping copper prices. We are expecting a higher average price in the third quarter."
China's factory activity hit multi-month highs in June, official and private surveys showed on Tuesday reinforcing signs that the world's second-largest economy is steadying as the government steps up policy support.
However, three-month copper on the London Metal Exchange
The most-traded September copper contract on the Shanghai Futures Exchange
Reflecting greater demand for metal, premiums for copper in Shanghai bond climbed $5 on Tuesday to $110-$130 according to China price provider Shmet, suggesting appetite for financing has picked up after a probe into fraud at a Chinese port led banks to review their lending practices.
China is relaxing the rules used for calculating the amount of deposits that banks can re-lend as loans, an attempt hailed by some economists as the latest move to stimulate growth in its cooling economy.
Elsewhere, the outlook for metals demand was brightening after a string of factory reports on Tuesday.
Global manufacturing activity accelerated in June, and with new orders coming in faster output is likely to pick up in the coming months, a business survey showed on Tuesday.
U.S. manufacturing activity rose at a steady clip in June and automobile sales raced to their highest level in almost eight years, pointing to momentum in the economy after a turbulent start to the year.
Newmont Mining Corp
A Chinese bank is suing a local government financing vehicle over a bad loan in a rare public display of a deepening rift between lenders and borrowers in China's murky $3 trillion local debt market.
