By Manolo Serapio Jr. MANILA, Sept 11 (Reuters) - London copper futures rose more than 1 percent on Friday while Shanghai futures pared losses after solid industrial output data from China boosted the outlook for demand and fueled a dollar sell-off against higher-yielding currencies. The dollar slumped to a one-year low against a basket of currencies .DXY after data showing Chinese industrial output expanding at the fastest pace in 12 months, showing the world's third-largest economy was well on the road to recovery. [ID:nPEK293624] China's copper output hit a record 364,900 tonnes in August while production of lead and zinc also leapt to all-time highs. [ID:nPEK300366] "It's fantastic. It's exactly what we need, that people start producing and buyers start rushing in to buy while prices are still low," said Ciaran Moore at Halifax Investments. Data also showed China's imports of unwrought copper and semi-finished copper products in August fell 20 percent from the previous month, largely in line with market expectations as record purchases in the first half inflated inventories. [ID:nSP364371] "There is a feeling that the restocking process may be coming to an end. We are at a point now where industrial production is very strong but many manufacturers are well-stocked and have slowed their purchases," said Ben Westmore, commodities economist at National Australia Bank. Ahead of the data release, Chinese officials said economic conditions are not yet right for China to exit its proactive fiscal policy, suggesting Beijing will continue with stimulus measures. [ID:nPEK285428] Three-month copper on the London Metal Exchange MCU3 rose $76 to $6,370 a tonne by 0409 GMT, after finishing down $121 on Thursday in an across-the-board sell-off. Shanghai's benchmark third month copper SCFc3 trimmed losses, down 230 yuan at 49,970 yuan ($7,316) a tonne at the midday break, after falling as low as 49,360 yuan earlier. LME copper is up 1.4 percent so far from the previous week while Shanghai metal is nearly 1 percent higher. MF Global commodity analyst Edward Meir said the recent correction in metals could be "fairly shallow in scope" with the dollar weakness providing support. "Having said that, as metals shift their gaze away from the dollar and focus more on the fundamentals, the recent price advances should give way to trading range markets. Investors are awaiting weekly inventory data from the Shanghai Futures Exchange, with some traders looking at an increase of between 1,000-2,000 tonnes for copper. "We forecast an increase of 2,000 tonnes since demand remains weak, but we expect it to recover in September and October," said analyst Shao Hebin at Great Wall Futures. Shanghai copper stocks rose 0.6 percent to a fresh two-year high of 87,108 tonnes last week from the prior week. LME lead MPB3 also cut losses after touching a low of $2,067 a tonne, its weakest in more than a week. The battery material dropped $25 to $2,095. On Thursday lead traded as low as $2,085, down 13.3 percent from the previous day's close in its biggest daily fall ever, after China's state-run research body Antaike said the country's refined lead surplus is expected to grow this year and widen further in 2010, despite recent smelter shutdowns following a spate of poisoning incidents. [ID:nPEK288741] Base metals prices at 0409 GMT Metal Last Change Pct Move End 2008 Pct chg 09 LME Cu 6370.00 76.00 +1.21 3060.00 108.17 SHFE Cu* 49970.00 -230.00 -0.46 23840.00 109.61 LME Alum 1855.00 1.00 +0.05 1535.00 20.85 SHFE Alum* 15030.00 -55.00 -0.36 11540.00 30.24 COMEX Cu** 289.25 3.30 +1.15 139.50 107.35 LME Zinc 1905.00 -15.00 -0.78 1208.00 57.70 SHFE Zinc 15245.00 -270.00 -1.74 10120.00 50.64 LME Nickel 17500.00 300.00 +1.74 11700.00 49.57 LME Lead 2095.00 -25.00 -1.18 999.00 109.71 LME Tin 14325.00 175.00 +1.24 10700.00 33.88 LME/Shanghai arb^ 912 Dollar/yuan 6.8272 \ 6.8282 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month

Source