METALS-Copper rallies on back of dollar, demand outlook

 * Copper up on China demand revival; eyes import data
 * Aluminium rises to highest since Sept 2008
 * Coming up: ECB rate hike decision on Thursday
 (Recasts, adds New York dateline/byline, updates with New York closing copper
price, adds graphic and analyst comments)
 By Chris Kelly and Sue Thomas
 NEW YORK/LONDON, April 6 (Reuters) - Copper ended sharply higher on
Wednesday, posting its biggest one-day gain in two weeks as currency-related
buying and perceptions of healthier Chinese purchases fed the rally.
 Copper's strength fed through to the broader base metals complex, with
nickel (CMNI3: Quote, Profile, Research) rallying as much as 4.3 percent, lead (CMPB3: Quote, Profile, Research) extending a
five-day rally, and aluminium (CMAL3: Quote, Profile, Research) hitting its priciest level since
September 2008.
 The more-optimistic tone followed a strong performance in Chinese equities
(.SSEC: Quote, Profile, Research), one day after the country raised interest rates for a fourth time
since October. This strength indicated to investors that the tightening
measures will not thwart demand from China, analysts said. [ID:nL3E7F51LX]
 "The evidence to this point is that the Chinese rate hikes have kind of
controlled things and slowed things down a bit, but they haven't had a material
impact on demand for commodities in general," said Bill O'Neill, partner of
LOGIC Advisors in Upper Saddle River, New Jersey.
 London Metal Exchange (LME) three-month copper (CMCU3: Quote, Profile, Research) rallied 2.3 percent
or $215 higher, to close at $9,605 per tonne, its biggest daily percentage gain
since March 23.
 COMEX May copper (HGK1: Quote, Profile, Research) shot up 10.55 cents to settle at $4.37 per lb, as
the momentum pushed the contract up near its trendline resistance.
 (Graphic: http://link.reuters.com/rap88r )
 "If we have some extension tomorrow and Friday to the upside, we're
probably going to take out that trendline and work toward $4.45 (per lb)," said
Scott Meyers, senior trading analyst with Pioneer Futures in New York.
 "If we take out $4.45 on a settlement, I think there is room for $4.55 and
then the contract highs ... it's really setting up for that kind of move right
now."
 Steve Platt, futures analyst with Archer Financial Services in Chicago, saw
support from the currency markets, where the euro climbed against the dollar to
its highest in more than a year ahead of an expected rate hike by the European
Central Bank on Thursday. [USD/]
 Copper prices now stand within 6 percent of their mid-February records at
$10,190 per tonne in London and $4.6575 per lb in New York, as investors bet
that China's economy, which expanded by 10 percent in 2010, will need greater
amounts of raw materials to satisfy that rate of growth.
 "I still think the major mistake the bears are making is the same mistake
they were making when copper was $2.50 (per lb), that is demand is much greater
than people anticipate," LOGIC Advisors' O'Neill said, adding that bullish
comments from some of the world's leading producers at the CESCO/CRU mining
conference in Chile this week reinforced this view.
 "The fundamental demand is still there (China). The credit situation in
China, when that changes, has a short-term effect, but the underlying growth
story in demand is still there," Xstrata (XTA.L: Quote, Profile, Research) Copper Chief Executive Charlie
Sartain said on the sidelines of the CRU conference.
 "Internationally we see a recovery in other markets not as significant as
China," he added. "In markets such as the U.S., we see a recovery there."
[ID:nN05156790]
 For more stories from the CESCO/CRU mining conference, click:
[ID:nCESCOCRU]
 IMPORT REBOUND?
 Furthermore, expectations are building for a rebound in China's copper,
iron ore and coal imports in March, with shipments of refined copper expected
to rise from February's 27-month low. [ID:nL3E7EL08U]
 "The general expectation is that those numbers will be reasonably positive
because we know that some imports were delayed from February to March due to
the Chinese New Year holiday," said David Wilson, director of metals research
at Societe Generale.
 China's General Administration of Customs will publish preliminary import
data for March on April 11.
 Aluminium (CMAL3: Quote, Profile, Research) rose to $2,685 a tonne, its highest since September 2008,
before ending up $29 at $2,670.
 Open interest on aluminium LME contracts is near its highest since the
middle of January (MAL-OI-TOT: Quote, Profile, Research).
 Latest data showed inventories of the metal in LME warehouses were down
4,175 tonnes at 4,589,000, but remained consistently high and within reach of a
record high 4,640,750 tonnes hit in January last year. (MAL-STOCKS: Quote, Profile, Research)
 Metal Prices at 1847 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       437.60       11.15     +2.61     444.70     -1.60
 LME Alum      2670.00       29.00     +1.10    2470.00      8.10
 LME Cu        9600.00      210.00     +2.24    9600.00      0.00
 LME Lead      2820.00       30.00     +1.08    2550.00     10.59
 LME Nickel   26425.00     1020.00     +4.01   24750.00      6.77
 LME Tin      32050.00      445.00     +1.41   26900.00     19.14
 LME Zinc      2450.00       25.00     +1.03    2454.00     -0.16
 SHFE Alu     16830.00       75.00     +0.45   16840.00     -0.06
 SHFE Cu*     71480.00     1040.00     +1.48   71850.00     -0.51
 SHFE Zin     18580.00      410.00     +2.26   19475.00     -4.60
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
 (Additional reporting by Rebekah Curtis and Silvia Antonioli in London;
editing by Dale Hudson)

METALS-Copper rallies on back of dollar, demand outlook