* Chinese copper demand expected to remain strong * Copper cancelled warrants double * Chinese non-visible aluminium inventory a concern LONDON, July 27 - Copper prices surged to 10-month highs on Monday, boosted by growing optimism about economic growth and demand in China, the world's largest consumer of industrial metals. Three-month aluminium on the London Metal Exchange rose to $1,855 a tonne, a gain of more than 40 percent since February and the highest since November last year, as worries about short-term supplies mounted. Copper hit a session high of $5,646 a tonne. It was untraded in the rings, but bid at $5,625 compared with $5,520 at the close on Friday. The metal used in power and construction has gained more than 80 percent since the start of the year. Much of that gain has been built on Chinese buying, which analysts say is strong because of fiscal stimuli. "China is throwing off its connection with Western demand," said John Meyer, analyst at investment bank Fairfax. "Chinese demand is real, there is strong demand for copper concentrates, some of that is because of a lack of scrap." China's insatiable appetite is highlighted in data for June imports, which jumped to a record for the fifth month running and copper stocks in LME warehouses. Latest data showed LME stocks rose 3,475 tonnes to above 277,425 tonnes, but they are down from around 500,000 tonnes in early April. Also potentially highlighting strong demand are cancelled warrants -- stock earmarked for delivery -- which nearly doubled to above 16,000 tonnes on Friday from Thursday. NON-VISIBLE INVENTORY Aluminium traded at $1,846 a tonne from $1,807 at the close on Friday. Higher prices of the metal used in transport and packaging have been fuelled by financing deals, which are estimated to have tied up about 70 percent of LME stocks until next May. But stocks of the metal in LME warehouses are at record levels around 4.5 million tonnes and they will come back to haunt the market, analysts said. "There appears to be little relief to the global oversupply situation," Deutsche Bank said in a note. "China is still stockpiling aluminium, a metal it has been a structural exporter of most of this decade. As a result and despite the recent modest pickup in demand, we remain concerned over the sheer level of metal currently floating as non-visible inventory in China." Nickel hit $17,000 a tonne, the highest in 10 months. The stainless steel ingredient traded at $16,950 from $16,750. "Nickel has been creeping up, following other metals to a degree, but also following the restart of ferrochrome production at International Ferro Metals," Meyer said. International Ferro Metals said it plans to restart its second ferrochrome furnace in mid-August due to increased demand from the Chinese steel industry. Zinc, used to galvanise steel, also hit a 10-month high of $1,740 a tonne. It was at $1,736.50 from $1,692 on Friday, lead traded at $1,800 a tonne from $1,750 and tin at $14,775 from $14,550. Metal Prices at 1221 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 254.75 3.05 +1.21 139.50 82.62 LME Alum 1845.00 38.00 +2.10 1535.00 20.20 LME Cu 5590.00 70.00 +1.27 3060.00 82.68 LME Lead 1793.00 43.00 +2.46 999.00 79.48 LME Nickel 16900.00 150.00 +0.90 11700.00 44.44 LME Tin 14600.00 50.00 +0.34 10700.00 36.45 LME Zinc 1723.00 31.00 +1.83 1208.00 42.63 SHFE Alu 14820.00 635.00 +4.48 11540.00 28.42 SHFE Cu* 44970.00 1270.00 +2.91 23840.00 88.63 SHFE Zin 14445.00 395.00 +2.81 10120.00 42.74 ** 1st contract 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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