The Chinese leadership is confident the country has found it. Germany is sure it hasn't happened yet. Those searching for it in the United States have been told by President Obama to be patient.

Italian car company Fiat says it's definitely seen it,global metals giant Rio Tinto thinks we're near it but Detroit automotive companies are still frantically searching for it.

The hot topic that is exercising the minds of financial and political leaders is whether the world economy has stopped free-falling and is starting to stabilize. It is the floor and even the first fleeting sightings last week helped the LME metals consolidate at higher levels.

The Most Valuable Commodity Confidence, as Chinese premier Wen Jiabao has said, is more important than gold or money at times of economic  turbulence.

China, for one, is confident that the worst is over.

Before (the economy) bottoms out, it has to bottom. I believe it has bottomed, with the stimulus package and signs of recovery in some industries, said Fan Gang, who sits on the Chinese central bank's monetary policy advisory committee.

Zhou Xiaochuan, governor of the central bank, agrees. In a paper posted on the bank's website on Thursday, Zhou said some leading indicators are pointing to recovery of economic growth, indicating that rapid decline in growth has been curbed.

Recovery in China may not be enough to drag the rest of the world out of recession but the country's dominant influence in the metals markets means the sector should be an early beneficiary.

Hence the confident assertion by Guy Elliott, chief financial officer of global mining house Rio Tinto, that we are not far away from the bottom and that there is a case, you can believe, for a recovery in the second half.

BUYER OF FIRST RESORT

Chinese buying is already a key pillar of support in the recent price recovery in industrial metals, which has seen the bellwether copper price put in its strongest quarterly performance since June 2006.

The country is snapping up metal like there's no tomorrow.

The full February trade figures out at the start of the week confirmed that imports of refined copper hit a fresh all-time high of 271,000 tonnes. Imports of refined zinc hit a multi-year high of 77,000 tonnes in February as did those of lead.

China has switched to net importer of primary and alloy aluminium in the first two months of this year after deluging the rest of the world with exports over the last few years.

All four metals have been targeted by national and regional Chinese stock-piling initiatives. There are many who argue that restocking is not the same as actually using the metal for consumption and that Chinese buying is in reality no more than the illusion of demand.

That is particularly the case in those metals, such as aluminium and zinc, where the stock-building programme is intended primarily to bail out distressed local producers.

Whether China really needs more aluminium and zinc is a very moot point. But by buying up domestic metal at a premium to prevailing prices, the country has opened up a monster arbitrage with LME prices.

In other words China has become the buyer of first resort for the world's surplus metal and that metal, unsurprisingly, is now on the move.

 The dragon's appetite is acting as a significant brake on the previous strong rise in LME inventories of metal and has provided a key underpinning for the Q1 metals rally.

ELSEWHERE IT IS STILL ELUSIVE

Confidence that the rest of the world is bottoming out would provide another key support to industrial metal prices.

But outside of China, no one is quite sure whether it is there or not. The signals are still highly ambivalent.

In the euro-zone the purchasing managers index for the manufacturing index stabilised in March, although the closely-watched IFO index in Germany sank to a fresh post-reunification low. That prompted IFO economist Gernot Nerb to warn that the lower turning point has not yet been reached.

Fiat, though, is sure it's there. We are convinced that, at the economic and global level, we have touched bottom, said the Italian carmaker's head, Sergio Marchionne.

No such confidence in Japan, though, where the Japan Automobile Manufacturers Association (JAMA) forecast sales of new cars, trucks and buses to fall 8.0 percent to a 30-year low in the coming financial year starting April.

And, critically, no sign of it in the automotive sector in the U.S, where the administration's tough line on restructuring has raised the prospect of a bankruptcy among The Big Three.

The good news/bad news oscillator is pushing back any consensus view of short-term metals prices. After an up-down sort of week, most of the major LME contracts ended little changed. China pulls to the upside, the rest of the world, most particularly Detroit, continues to pull to the downside.

This leaves the recent copper-led LME rally on very fragile ground. The market needs more sightings of it, if the gains are to be extended and the still numerous bears kept on the back foot.

While it remains elusive, however, there is the not-so little matter of this afternoon's official announcement on the fate of the Detroit automakers. A failure of one of the Big Three has been a nagging fear on the LME street for months. That fear could take concrete shape in the coming days, an altogether different sort of it.LME three-month valuations on Friday and weekly changes:

                               Close                      Chg on Week           Pct Chg

 Aluminium              $1,420                     -$39                        -2.7

 Copper                   $4,050                     +$95                       +2.4

 Lead                      $1,280                     -$65                        -4.8

 Nickel                     $9,700                     -$275                       -2.8

 Steel FE                 $322.5                     +$17.5                     +5.7

 Steel Med               $325                                       +$35                       +12.1

 Tin                         $10,200                   +100                       +1.0

 Zinc                       $1,350                     +$90                       +7.1

 (Editing by James Jukwey)

Andy Home is a Reuters columnist. The opinions expressed are his own --© Thomson Reuters 2009. All rights reserved.