Copper follows equities up, lead hits 13-mont

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    LONDON -- Copper prices climbed higher, boosted by a weaker US dollar and firm equities in major consumer China, while lead hit a 13-month high on worries over Chinese smelter closures.

    Copper for three-months delivery on the London Metal Exchange traded at $US6,244 a tonne at 1938 AEST from a close of $US6,175 on Wednesday, when the metal hit a near two-week low of $US6,025.

    Lead traded at $US2,189 a tonne from $US2,111, having earlier touched $US2,219.50, its highest point since early August 2008.

    "We've had a pullback from the highs but that was just necessary consolidation. The outlook is still favourable," said Citigroup analyst David Thurtell.

    "A weaker dollar and stronger Chinese equities are boosting metals ... (also) the eurozone composite PMI (Purchasing Manager's Index) was revised up, pointing to expansion," he added.

    The US dollar edged lower against the euro on Thursday ahead of a European Central Bank policy meeting and following an improvement in the Eurozone services PMI.

    A weak dollar makes dollar-priced metals cheaper for non-US investors.

    Investors were also eyeing Shanghai stocks, which jumped 4.6 per cent after a top securities regulator pledged late on Wednesday to keep the market stable.

    Record copper imports by China, the world's biggest consumer of the metal, have been key in driving copper, which has nearly doubled in price this year.

    The metal has also been driven by speculative buying and signs of economic recovery. Although there is a risk of a price correction in September, analysts are cautiously bullish longer term.

    "I do not think markets have gone ahead of fundamentals. We have seen a significant rebound in economic activity in China and also a bottoming out in western countries, demand for base metals is increasing," said Peter Fertig, an analyst at Quantitative Commodity Research.

    Traders are awaiting monthly US non-farm payrolls data due out on Friday for reassurance on the outlook for the economy and metals demand.

    Lead smelter shutdowns

    Analysts said worries were growing about lead supplies from China after smelter shutdowns following lead poisoning incidents. "The prevention of heavy metal pollution should be put in a more urgent and more important position," Environment Minister Zhou Shengxian told a national pollution prevention meeting, the Communist Party mouthpiece the People's Daily said.

    In other metals traded, aluminium was at $US1,853 a tonne against $US1,846. Latest LME data showed aluminium stocks fell 3,000 tonnes, but remained near a record 4.6 million tonnes.

    Alcoa, the largest US aluminium maker, said Chinese aluminium consumption would rise 8 percent in the second half from a year ago and cut its forecast drop in global demand for all 2009 to 5.5 per cent from earlier forecasts of seven per cent. Elsewhere, zinc was at $US1,855 from $US1,828, tin was at $US14,200 from $US13,950, while nickel was at $US18,300 from $US18,100.;src=rss

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