* Tight supplies also supporting copper * U.S. housing starts hit six-month high, permits up * Euro extends gains vs dollar after U.S. data By Marie-Louise Gumuchian LONDON, July 19 (Reuters) - Copper hit its highest since mid-April on Tuesday on better-than-expected U.S. housing data, a weaker dollar and hopes Chinese demand will remain firm, helping offset investor anxiety over U.S. and European sovereign debt concerns. Three-month copper on the London Metal Exchange was $9,846 a tonne at 1302 GMT, compared with Monday's close of $9,694 a tonne. The metal used in power and construction earlier hit $9,850 a tonne, its highest since mid April. "We've seen quite a rebound in euro/dollar and equity markets ... It seems it is very much markets reconsidering that the debt crisis is not something that is going to weigh too much on global growth," Danske Bank analyst Christin Tuxen said. "Base metals are rebounding on this, maybe reconsidering that the situation at least in Asia is not that bad and indeed in our view we're likely to see Chinese demand for raw materials bounce back quite significantly within the next few months." The dollar dropped versus a basket of currencies with no resolution in sight for debt problems on either side of the Atlantic. A weaker dollar makes commodities more affordable for holders of other currencies. The euro extended its gains versus the dollar after the U.S. housing data. The data showed housing starts rose more than expected in June to touch a six-month high and permits for future construction unexpectedly increased, a U.S. government report showed on Tuesday, likely reflecting growing demand for rental apartments. Concerns remain, however, about debt crises on both sides of the Atlantic. The White House is seeking a last-ditch plan with Congress to raise the U.S. debt ceiling and European governments are struggling to reconcile competing proposals for a second bailout for Greece while trying to prevent the crisis from spreading through the region. "Despite all these uncertainties, we've seen copper very resilient to any downside risk and that could also be explained beyond the supply issues by what we see as healthy appetite from the Chinese despite their price sensitivity," said Xin Yi Chen, commodity analyst at Barclays Capital. Investors are optimistic demand from top copper consumer China will remain strong in the second half of the year given little sign that its monetary tightening efforts had sharply slowed the world's No. 2 economy, which grew a faster-than-forecast 9.5 percent in the second quarter. COPPER DEFICIT Market participants also expect a deficit in global copper supply this year, with shortage risks increased by weather and labour unrest hitting major mines in Chile and Indonesia. Copper inventories at LME warehouses rose 4,450 tonnes to 467,400 tonnes, latest data showed. Lead and zinc also hit their highest since mid-April. Zinc, used in galvanizing was $2,480 from $2,431 a tonne, having earlier hit $2,486. Battery material lead was at $2,763 from $2,730 a tonne, having hit $2,779 a tonne. Aluminium was $2,532 a tonne from $2,495. Nickel was $24,126 a tonne from $23,825. Western Areas , Australia's third-largest nickel miner, is forecasting fiscal 2011/12 nickel production of 25,000-27,000 tonnes, versus a bumper 32,222 tonnes in the previous year, a company executive said. Tin was at $27,775 from $27,350 a tonne. "Overall we still see these firmer trends in the metals as likely to lead to better selling opportunities and would watch the charts careful for signs that the rallies are faltering," Basemetals.com analyst William Adams said in a note. Metal Prices at 1258 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 447.30 7.45 +1.69 444.70 0.58 LME Alum 2512.00 18.00 +0.72 2470.00 1.70 LME Cu 9779.00 85.00 +0.88 9600.00 1.86 LME Lead 2762.00 32.00 +1.17 2550.00 8.31 LME Nickel 24000.00 175.00 +0.73 24750.00 -3.03 LME Tin 27550.00 350.00 +1.29 26900.00 2.42 LME Zinc 2471.00 40.00 +1.65 2454.00 0.69 SHFE Alu 17665.00 -10.00 -0.06 16840.00 4.90 SHFE Cu* 72830.00 920.00 +1.28 71850.00 1.36 SHFE Zin 18770.00 380.00 +2.07 19475.00 -3.62 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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