MARKETS-METALS (UPDATE 3):METALS-Copper near 10-mth high, buoyed by demand hopes * Hopes grow for second half, eyes on China data * Capacity restarts mean aluminium's gains limited By Pratima Desai LONDON, Aug 10 (Reuters) - Copper prices came within touching distance of 10-month highs on Monday as investor money, betting on global economic growth and demand, flooded the industrial metals market. Three-month copper on the London Metal Exchange traded at $6,225 a tonne, not far from last week's $6,235, which was the highest since early October last year. The metal used in power and construction was trading at $6,196 a tonne at 0958 GMT from $6,150 at the close on Friday. Expectations of improvement in the economy have been growing for weeks and supportive data includes last week's manufacturing figures from the United States and China, while U.S. non-farm payrolls on Friday also played an important role. "People are becoming more postive about the economic and demand outlook," said Gayle Berry, analyst at Barclays ( BCS - news - people ) Capital. "Economic data reinforces people's views that the second half of the year is going to be stronger for economic growth. Copper is up about 50 percent since April, when markets started to think the worst of the receession could be over. Eyes are on economic data from China, the world's top industrial metals consumer, due on Tuesday and expected to confirm stronger growth. "This data could break the rally or give it a few more legs," a trader said. "Overall though, the market needs to correct, it all happened too quickly." CAPACITY RESTARTS Aluminium was at $2,030 a tonne from $2,020 on Friday. The metal used in transport and packaging is also up about 50 percent since April. Part of the reason behind the rise is expectations of a pick up in demand from the reviving auto sector. But just as important is the amount of aluminium -- about 70 percent of the record 4.56 million tonnes held in LME warehouses -- tied up in financing deals to release cash for producers. "From here, further sharp gains in the price of aluminium will be limited by capacity re-starts, particularly in China and Russia, and the sale of aluminium stocks held in China," Citigroup ( C - news - people ) said in a note. Stainless steel ingredient nickel was trading at $20,190 a tonne from $19,625 on Friday. Last week it traded at an 11-month high of $20,450 in the rings at the close. It has been boosted by signs of restocking by stainless steel mills, which account for about two-thirds of global nickel demand estimated at around 1.2 million tonnes this year. The focus in the tin market was on the dominant position holder which has bought tin for delivery in September and sold it for December. The premium for the September contract over December stands at around $400 compared with $1,000 on July 31. Three-month tin was trading at $15,000 a tonne from Friday's last bid at $14,750, lead was at $1,913 from $1,900 and zinc was at $1,920 from $1,899. Metal Prices at 1002 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 282.00 3.85 +1.38 139.50 102.15 LME Alum 2025.00 5.00 +0.25 1535.00 31.92 LME Cu 6185.00 35.00 +0.57 3060.00 102.12 LME Lead 1905.00 50.00 +2.70 999.00 90.69 LME Nickel 20100.00 475.00 +2.42 11700.00 71.79 LME Tin 14625.00 -75.00 -0.51 10700.00 36.68 LME Zinc 1910.00 64.00 +3.47 1208.00 58.11 SHFE Alu 15290.00 370.00 +2.48 11540.00 32.50 SHFE Cu* 48840.00 2090.00 +4.47 23840.00 104.87 SHFE Zin 15160.00 380.00 +2.57 10120.00 49.80 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Pratima Desai; editing by Anthony Barker)

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