MARKETS-METALS (UPDATE 6) * Chinese arbitrage buying boosts prices * Corporate and macroeconomic data cap gains * Coming Up: Fed chairman Ben Bernanke 1800 GMT (Recasts, updates prices and comments) By Michael Taylor and Humeyra Pamuk LONDON, July 21 (Reuters) - Copper rose to its highest in more than three-weeks on Wednesday due to strong physical and Chinese buying and falling inventories, but traders said economic growth worries were likely to keep a lid on prices. Copper's rise lifted other industrial metals. Zinc climbed to a seven-week peak, while tin hit its highest since April 30. Battery-material lead saw a two-month high. Benchmark copper for three-month delivery on the London Metal Exchange traded at $6,839 a tonne by 1441 GMT, from $6,637 on Tuesday. The metal, used in construction and wiring, earlier touched $6,874.75, its highest since June 28. "There was Chinese buying overnight, which triggered this rise," RBC Capital Markets trader Randy North said. "It then pushed through some stop levels; $6,750 and then $6,800 and it's been technical buying and short-covering after that." North said from a technical point of view, markets could go higher but he added: "Unless you see a serious tightening in the physical market or Euro up through 1.30, I just don't see how copper can sustain these kinds of levels." Copper has been stuck in a range of around $6,300 to $6,900 since early June. "You've got this tussle between positive and negative, and as a consequence I see these things trade range bound," said analyst Daniel Brebner at Deutsche Bank. Continuous stock drawdowns underpin prices, but unexpectedly poor economic data from the United States, like Tuesday's new U.S. home construction hitting an eight-month low, is capping further gains and clouding the demand prospects. Reuters' mid-year metals price poll showed copper was expected to average $6,878 a tonne this year from $7,077 a tonne in the January poll. For aluminium the number was an unchanged $2,094 a tonne. STEADIER TONE Metals did not take any support from the currency markets on Wednesday, where the euro slipped versus the dollar, making dollar-denominated metals more expensive for non-U.S. currency holders. Investors also fretted over by data showing China's imports of refined copper fell for a third straight month in June. Copper stocks fell 1,975 tonnes to 417,625 tonnes, down from near seven-year highs at 555,075 tonnes hit in mid-February. Industry data showed, in the first four months of the year the copper market had moved into a deficit of 67,000 tonnes, from a 74,000 surplus in the same year-ago period. "We expect the firmer tone to continue through the balance of the week, as declining LME stocks, steadier equity markets...will all contribute to a steadier tone," MF Global said in a research note. Aluminium traded at $1,995 versus $1,971. Zinc was last at $1,914.50 a tonne from $1,875 and tin was last bid at $18,370 from $18,240. Steel-making ingredient nickel traded at $19,330 a tonne from $19,125, while lead gained to $1,864 from $1,837. Metal Prices at 1440 GMT Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 307.70 7.85 +2.62 334.65 -8.05 LME Alum 2006.00 35.00 +1.78 2230.00 -10.04 LME Cu 6833.00 196.00 +2.95 7375.00 -7.35 LME Lead 1856.00 19.00 +1.03 2432.00 -23.68 LME Nickel 19285.00 160.00 +0.84 18525.00 4.10 LME Tin 18200.00 -40.00 -0.22 16950.00 7.37 LME Zinc 1908.00 33.00 +1.76 2560.00 -25.47 SHFE Alu 15015.00 -15.00 -0.10 17160.00 -12.50 SHFE Cu* 53350.00 290.00 +0.55 59900.00 -10.93 SHFE Zin 15450.00 0.00 +0.00 21195.00 -27.11 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

Source