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Copper futures in New York climbed at the open on Wednesday, extending their weekly gains, with surprisingly strong U.S. new home sales data and a possible strike threat at the Highland Valley copper mine adding to the bullishness, sources said.

"The housing market is looking good. With the inventory that is out there and the cuts in home prices, I think you're probably going to see home sales start to increase, which should benefit the copper, as it would likely increase demand," said one broker at a New York trading house.

By 10:54 a.m. EDT (1454 GMT), copper for December delivery was up 1.70 cents, or about a half of a percent, at $3.4830 a lb on the New York Mercantile Exchange's COMEX division, ranging from an overnight low at $3.4570 to its early peak at $3.54.

"We gapped a little higher at the open, up to $3.51 and covered the gap already down to $3.49, so it looks like the $3.49 level is today's support," said one COMEX floor dealer.

Technicians pegged resistance in the benchmark December contract at around the $3.65 level, followed by $3.72.

Spot September rose 1.65 cents at $3.48.

COMEX copper volume at 10:00 a.m. was estimated at 4,000 lots.

Sales of new U.S. homes unexpectedly rose in August to a seasonally adjusted 1.050 million annualized rate after a sharp downward revision in July.

New single-family homes sales increased 4.1 percent in August from a downwardly revised July rate of 1.009 million, which was originally reported as 1.072 million. The revised July rate was the lowest since a March 2003 rate of 999,000, the Commerce Department said.

Meanwhile, Teck Cominco Ltd. said on Wednesday that the United Steel Workers union at its Highland Valley Copper operation in British Columbia has served a strike notice to the company.

Local 7619 of the union will be in a position to strike on October 1, when its current agreement with Teck Cominco expires. Mediation between the two sides has been suspended and is not expected to resume until September 30, the company said.

Highland Valley is the largest copper mine in Canada, producing 179,000 tonnes of the metal last year along with some molybdenum.

Separately, China's refined copper consumption is likely to rise by 5.6 percent this year and 5.3 percent next year, compared with 9 percent in 2005, as substitutes eat into demand, a senior analyst said on Wednesday.

"Yes, the copper market was weaker, but it was never done. The fact is that inventories are still low and if there is just a little bit of Chinese buying that comes back into the market, which it has, I think this market is ready to test the highs again," said one analyst.

London Metal Exchange-monitored warehouse stocks grew 475 tonnes to 122,425 tonnes on Wednesday, while COMEX stocks rose 348 short tons to 21,326 tons on Tuesday.

LME three-months copper last traded up $20 at $7,670 a tonne against Tuesday's kerb close.