* China Sept CPI dips to 6.1 pct, eases inflation fears
* Beijing expected to hold tightening policy - analysts
* S&P downgrades Spain's credit rating to AA- from AA
* COMING UP: G20 Finance Ministers meeting in Paris
By Marie-Louise Gumuchian
LONDON, Oct 14 (Reuters) - Copper rose on Friday, driven by positive
sentiment on China's latest inflation data and cautious optimism European
leaders are closer to agreeing a plan on the euro zone debt crisis.
Three-month copper on the London Metal Exchange rose more than 3
percent to $7,540.25 a tonne by 0907 GMT from Thursday's close of $7,310.
"The Chinese will have to come back and restock eventually ... because they
have been running stocks down in the past year," VTB Capital analyst Andrey
Kryuchenkov said.
China's consumer inflation dipped to 6.1 percent in September, sparing
policymakers a jump in price pressures while they fret about slower growth,
although stubborn food price rises showed Beijing's fight against inflation is
not over.
The inflation data, coupled with soft trade figures released on Thursday and
recent concerns over China's cash-strapped small and medium enterprises, seemed
to support the belief that Beijing will put its tightening policy on hold for
the moment.
China is the world's largest copper consumer accounting for nearly 40
percent of global demand estimated this year at around 20 million tonnes.
But the euro zone's finances remained a worry to investors as ratings agency
Standard and Poor's downgraded the long-term credit rating of Spain by one notch
to AA- from AA with a negative outlook.
The move was due to Spain's weak growth, tightening fiscal conditions and
high private sector debt, the agency said.
The euro was steady while European shares rose.
G20 MEETING
G20 finance chiefs and central bank heads meet in Paris on Friday urgently
needing to find a convincing solution to a deepening euro zone debt crisis that
has fanned fears of a global slide into recession.
"The next really big issue is the so-called comprehensive plan from Merkel
and Sarkozy at the end of October. That is the big risk here," Danske Bank
analyst Arne Lohmann Rasmussen said. "The buyers could be disappointed if they
cannot deliver what they promised."
German Chancellor Angela Merkel and French President Nicolas Sarkozy late
last week said they would announce a plan to solve the euro zone debt crisis by
the end of the month.
Also supportive to copper prices were lower inventories of the metal at LME
warehouses. Latest data showed stocks down 2,900 tonnes to 450,200 tonnes, still
about a third higher since last December.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange
rose 1.8 percent from Sept. 30, the exchange said on Friday. Aluminium stocks
rose 51.4 percent.
Short-selling, a popular target in volatile and rumour-riddled markets, has
been blamed by aluminium producer Alcoa's chief executive for a big fall
in the price of the metal and with it the company's share price.
Falling European aluminium premiums reflect concerns over a potential 2012
economic slump, but German industrial demand and financing deals are buttressing
demand for now, traders said on Thursday.
Three-month aluminium traded at $2,212.75 from a close of $2,207 a
tonne on Thursday.
Zinc traded at $1,942 from $1,923.5 a tonne while battery material
lead was at $2,039 from $2,036 a tonne. Tin traded at $22,500
from $21,950 a tonne and nickel was at $18,700 from $18,455 a tonne.
Metal Prices at 0908 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 341.15 10.80 +3.27 444.70 -23.29
LME Alum 2212.00 5.00 +0.23 2470.00 -10.45
LME Cu 7536.75 226.75 +3.10 9600.00 -21.49
LME Lead 2036.75 0.75 +0.04 2550.00 -20.13
LME Nickel 18676.00 221.00 +1.20 24750.00 -24.54
LME Tin 22450.00 -550.00 -2.39 26900.00 -16.54
LME Zinc 1942.25 18.75 +0.97 2454.00 -20.85
SHFE Alu 16695.00 35.00 +0.21 16840.00 -0.86
SHFE Cu* 56010.00 1130.00 +2.06 71850.00 -22.05
SHFE Zin 15295.00 135.00 +0.89 19475.00 -21.46
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
