METALS-Copper, aluminium up on weak dollar, outlook poor

LONDON, Oct 12 (Reuters) - Copper gained on Monday and aluminium rose to a near one-month high on the back of a weaker dollar and as a looming strike in Chile supported the prices. But sentiment among the thousands of metals and mining industry executives gathered for the London Metal Exchange (LME) week were cautious on copper's price prospects as they said demand reamined poor. Copper for three-months delivery MCU3 on the London Metal Exchange closed at $6,275 a tonne, versus $6,230 on Friday while aluminium MAL3 rose to $1,958 a tonne, its highest since September 18. "The dollar's made a push on the downside and that's the main thing today," analyst Dan Smith at Standard Chartered said, adding the news that BHP's (BLT.L: Quote, Profile, Research) Spence mine in Chile could be going on strike had also underpinned prices. The dollar fell as investors positioned ahead of U.S. corporate earnings later this week on expectations that stronger-than-forecast results wuold drive risk tolerance higher. [FRX/] "The comments from LME week have so far been relatively downbeat. Most people seem to think there will be further weakness generally speaking. People often talk about copper being a good long term play, which highlights the downside in the short term," he said. The price of copper, used extensively in construction, has more than doubled so far this year on the back of Chinese restocking and on improved signs for the global economic growth. But the rally has stalled since August, and analysts doubt it has further legs. "Sentiment is upbeat...but sentiment alone is not enough to push the market to new highs," said Andrey Kryuchenkov, analyst at VTB Capital, adding fundamentals needed to improve before prices could forge higher. Last week upbeat data on the U.S. service sector and German manufacturing supported markets. [ID:nN05400003] [ID:nL7400974] But a new rise in copper stocks capped sentiment. Inventories at LME warehouses rose 775 tonnes to 347,375 tonnes, their highest since mid-May. Stocks have risen since mid-July, reversing a trend of consistent falls earlier this year. "The world economy is by no means out of the woods, but in our view the theme during LME Week will be the prospect of demand recovery in 2010," Royal Bank of Scotland said in a note. Investors are also eyeing China's preliminary September trade data, due on Wednesday, to see whether demand from the world's top consumer of base metals is holding up. Imports of unwrought copper and semi-finished copper products are expected to fall for the third straight month, after record imports in the first half. [ID:ID:nHKG142718] Aluminium MAL3, used in transport and packaging, ended the day at $1,947 a tonne, from $1,909. Aluminium could rise further in the short term as restocking across the supply chain overcomes the impact of excess inventory and capacity in the market, JP Morgan said. [ID:nL9662064] Zinc MZN3 was at $2,094 from $2,033 and battery material lead was last at $2,294 from $2,249. China's Henan Yuguang Gold & Lead Co Ltd (600531.SS: Quote, Profile, Research), the country's top lead producer, said on Saturday the smelter would shut down its sintering system which can produce 4,000 tonnes of lead bullion. [ID:nSHA231018] Tin MSN3 closed at 14,675 from $14,800 and nickel MNI3 was last quoted $18,820 from $18,750. Metal Prices at 1631 Metal Last Change Pct Move End 2008 Ytd Pct. move COMEX Cu 284.75 1.90 +0.67 139.50 104.12 LME Alum 1936.00 27.00 +1.41 1535.00 26.12 LME Cu 6260.00 -70.00 -1.11 3060.00 104.58 LME Lead 2282.00 33.00 +1.47 999.00 128.43 LME Nickel 18700.00 -50.00 -0.27 11700.00 59.83 LME Tin 14575.00 -225.00 -1.52 10700.00 36.21 LME Zinc 2080.00 47.00 +2.31 1208.00 72.19 SHFE Alu 14895.00 50.00 +0.34 11540.00 29.07 SHFE Cu* 49100.00 270.00 +0.55 23840.00 105.96 SHFE Zin 15810.00 80.00 +0.51 10120.00 56.23 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07