Illiquid conditions, LME stocks data hit US copper

NEW YORK, Aug 29 (Reuters) - U.S. copper futures ended with modest losses on Friday as rising inventory levels in London and an uncertain demand outlook in China weighed on sentiment, while volumes thinned out ahead of the long holiday weekend.

NOTE: For detailed report, click on [MET/L].

* New York commodity markets will be closed on Monday, Sept. 1, for the U.S. Labor Day holiday. The markets will reopen on Tuesday, Sept. 2, for normal trading hours.

* Most-active copper for December delivery HGZ8 settled down 1.35 cents at $3.3870 a lb on the New York Mercantile Exchange's COMEX division.

* The session range ran from $3.3445 to $3.41.

* Spot September HGU8 eked out a gain of 0.25 cent to close at $3.4295.

* COMEX estimated futures volume at a quiet 10,418 lots. Final volumes on Thursday totaled 18,682 lots.

* Open interest declined by 3,192 lots to 78,581 contracts open as of Aug. 28.

* London Metal Exchange copper warehouse stocks jumped another 3,325 tonnes on Friday, bringing total levels to a near-seven month high of 173,375 tonnes.

* Shanghai inventories fell a greater-than-expected 4,171 tonnes to 17,625 in the week ended on Thursday, their lowest in three years and enough for less than two days of Chinese consumption. CU-STX-SGH

* Copper prices may face additional near-term sales pressure, but renewed Chinese demand in the fourth quarter is forecast to be the leading impetus behind a recovery in prices - analysts.

* "Now that arbitrage opportunities have reappeared between the London and Shanghai markets, Chinese fabricators are expected to replenish some of their drawn-down stocks." - Catherine Virga, analyst, CPM Group in New York.

* "In addition, leading indicators in China also point to a recovery in Chinese economic activity, which is bullish for copper. If exchange stocks resume their descent seen during the first five months of this year, (London) copper prices could be pushed back toward $8,500 in late September or October." - Virga.

* International Copper and Study Group (ICSG) data showed the market narrowed to a 155,000-tonne deficit in January to May 2008, from a 238,000-tonne deficit last year. [ID:nN29286713]

* The Institute for Supply Management-Chicago business barometer surged to 57.9 in August from 50.8 in July, and against economists forecasts at 50.0. [ID:nNAT004324]

* LME copper for delivery in three-months MCU3 closed at $7,510 a tonne from $7,535 on Thursday. (Reporting by Chris Kelly; editing by Jim Marshall)