June 30 (Bloomberg) -- Copper futures in Shanghai rose for the first day in three after a report yesterday on U.S. economic growth signaled more demand for the metal in the country, the world's second-largest user after China.

The U.S. economy grew at a 3.8 percent annual pace in the first quarter with residential construction expanding 12 percent, the Commerce Department said. Cheap loans helped spur demand for homes, boosting copper consumption by about 400 pounds for every new single-family house built, according to industry estimates.

``The U.S. figures are fairly good,'' Cai Luoyi, a metal analyst at China International Futures (Shanghai), said today by phone. ``We continue to be optimistic about copper's broader trend as Chinese economic growth is also strong.''

Copper for delivery in September rose 480 yuan, or 1.5 percent, to settle at 32,840 yuan ($3,968) a ton on the Shanghai Futures Exchange when trading ended at 3:00 p.m. local time. It had risen as much as 1.8 percent to 32,930 yuan.

``Even if copper prices may not post fresh records, they are likely to be volatile and trade at high levels,'' said Cai.

Copper for delivery in three months on the London Metal Exchange, the world's biggest futures market for metals, rose to $3,435 a ton on June 20, the highest since the contract began trading in its current form in June 1986.

Declines

On the Changjiang Nonferrous Metals Spot Market, copper for immediate delivery rose for the first day in three, by as much as 320 yuan, or 0.9 percent, to 34,820 yuan a ton.

The premium paid for copper from Chile, the world's biggest producer, dropped as much as 150 yuan over the front-month on the futures exchange. This is the third straight day of declines in the premium.

Shanghai copper futures also rose after London prices closed above $3,300 a ton yesterday, a so-called support level on charts some traders use to predict price movements, said Cai.

Support refers to points on the charts where buying orders may be clustered.

Copper for delivery in three months on the LME yesterday initially fell as much as 2.2 percent to $3,280 a ton, the biggest intraday decline since June 23, before rising to close higher at $3,358. It traded $15, or 0.5 percent higher at $3,373 a ton at 2:40 p.m. Shanghai time.

Copper for delivery in September rose 0.30 cent, or 0.2 percent, to $1.5650 a pound on the Comex division of the New York Mercantile Exchange at 2:40 p.m. Singapore time in after-hours trade.

To contact the reporter on this story: Chia-Peck Wong in Singapore at cpwong@bloomberg.net.

Last Updated: June 30, 2005 03:05 EDT