MARKETS-METALS (UPDATE 4)
* China HSBC PMI hits 5-month high, supports demand outlook
* Dollar weakness buoys metals as US data disappoints
* LME copper stocks slip 175 tonnes to 375,100
(Recasts, updates official prices, adds detail/comment)
By Marie-Louise Gumuchian
LONDON, Sept 29 (Reuters) - Copper breached the $8,000 level for the first time since mid-April on Wednesday, boosted by manufacturing data in top metals consumer China and a weaker dollar.
Benchmark copper for three-month delivery on the London Metal Exchange traded at $8,021 a tonne in rings, versus a final bid at $7,951.00 at the close on Tuesday.
The metal, which is used in power and construction, earlier touched $8,038 a tonne -- near the $8,043.75 level not seen since August 2008.
"It's a very good combination for base metals -- strong numbers out of China and a weaker dollar," said Arne Lohmann Rasmussen, analyst at Danske Bank.
"You couldn't ask for more ... The strong number numbers out of China were quite important. It really removed a lot of fear in the market that we were heading for this double-dip."
A rise in HSBC's China Purchasing Managers' Index to a five-month high in September pointed to renewed, though moderate, momentum in the vast industrial sector that is the backbone of China's economy.
"Ongoing demand growth for copper in China and the limits of mine production are driving copper prices higher," investment bank Fairfax said in a note. "Copper is also seen as an investment metal these days and may benefit from the rise in gold."
The dollar suffered further losses on expectations that U.S. monetary policy would need further easing.
A weak U.S. currency makes metals priced in dollars less expensive for holders of other currencies.
The Fed is likely preparing a fresh round of quantitative easing measures to announce at the end of its Nov. 2-3 meeting, a report by influential hedge fund adviser Medley Global Advisors said on Tuesday, a source told Reuters.
Also on Tuesday, U.S. consumer confidence fell to its lowest level in seven months in September, underscoring lingering worries about the strength of the economic recovery.
COPPER SUPPLY WORRY
Sterlite Industries, a unit of London-listed Vedanta Resources has shut its copper-smelter unit in south India following an Indian high court order, a company spokesman said on Wednesday.
"It definitely adds to the bullish sentiment at the moment," said David Wilson, analyst at Societe Generale. "The copper market was already looking tight, this will only add to that sense of market tightness."
Falling LME inventories have also helped overall sentiment. Latest LME data showed that on Tuesday, copper stocks slipped 175 tonnes to 375,100 tonnes, having fallen from 6-1/2 year highs at 555,075 tonnes in mid-February.
Trading was thin however ahead of a week-long holiday in China from Friday.
Aluminium traded at $2,329 a tonne in LME rings from $2,309 on Tuesday, when it hit a five month high at $2,336.25.
LME stocks for the metal, used in transport and packaging, slipped 3,350 tonnes to 4.35 million tonnes. A large portion of those aluminium stocks are tied up in finance deals.
Steel-making ingredient nickel was untraded in LME rings but last bid at $23,150 from $23,175, while battery material lead was last bid at $2,296 from $2,281.
Zinc traded at $2,216 a tonne in exchange rings from $2,215 and tin was last bid at $24,325 from $24,000.
Tin, which is used in electrical solder, earlier touched $24,349 a tonne -- a peak not seen since May 2008 -- on supply worries in top exporter Indonesia.
Refined tin output from Indonesia may fall nearly 6 percent this year as heavy rains hit mining and more easily mined onshore reserves are being depleted, an analyst at the International Tin Research Institute said.
Metal Prices at 1214 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 364.05 0.45 +0.12 334.65 8.79 LME Alum 2328.00 19.00 +0.82 2230.00 4.39 LME Cu 8025.00 115.00 +1.45 7375.00 8.81 LME Lead 2296.00 15.00 +0.66 2432.00 -5.59 LME Nickel 23150.00 -25.00 -0.11 18525.00 24.97 LME Tin 24325.00 325.00 +1.35 16950.00 43.51 LME Zinc 2215.00 0.00 +0.00 2560.00 -13.48 SHFE Alu 15950.00 65.00 +0.41 17160.00 -7.05 SHFE Cu* 60790.00 420.00 +0.70 59900.00 1.49 SHFE Zin 17950.00 110.00 +0.62 21195.00 -15.31 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
