METALS-Manufacturing, weak dollar push copper to 2-wk high

* Manufacturing PMI surveys help boost copper

* Weaker dollar reinforces positive sentiment

* Tight nearby aluminum supplies
(Recasts, updates with New York closing copper prices, adds NEW
YORK to dateline and analyst comments)

By Chris Kelly and Maytaal Angel

NEW YORK/LONDON, July 1 (Reuters) - Copper surged on Wednesday
to its loftiest level in more than two weeks, driven by extended
losses in the dollar and upbeat manufacturing surveys in the
United States, Europe and China that reinforced economic recovery
hopes.

Other industrial metals also surged with lead hitting a
two-week peak of $1,760 a tonne and nickel gaining more than 8
percent at $16,600, its highest level since late September.

Copper for September delivery HGU9 on the New York
Mercantile Exchange's COMEX division jumped 5.85 cents, or 2.6
percent, to close at $2.3305 a lb, after hitting its highest level
in 2-1/2 weeks at $2.3690.

Benchmark copper MCU3 on the London Metal Exchange touched
$5,187.50, the highest since June 15, before ending up $120 at
$5,090 a tonne.

"It's all about the dollar and it's all about the confidence
in Chinese (economic) recovery to continue," said Michael Pento,
chief economist with Delta Global Advisors in Huntington Beach,
California.

China's manufacturing sector extended a steady recovery in
June. The official purchasing managers' index (PMI) rose to 53.2
from 53.1 in May, consolidating for the fourth month in a row
above the watershed mark of 50. [ID:nPEK138883]

Data from the Institute for Supply Management showed
manufacturing in the United States, the world's largest economy,
shrank in June, but at a slower pace than the month before.
[ID:nN01504898]

"It is moving in the right direction, I don't think it can
move much faster given underlying economic weakness," said Justin
Lennon, analyst at Mitsui Bussan Commodities.

Lennon said the fall in the new orders component in the ISM
survey to below 50, a level which divides expansion from
contraction, was probably due to a seasonal slowdown in
manufacturing activity.

Similar survey in Europe also showed manufacturing contracting
less than initially thought. [ID:nL1596673]

The improved manufacturing activity data hurt demand for the
dollar as a safe haven, making metals priced in the U.S. currency
cheaper for holders of other currencies. [USD/]

"I am not looking at a robust recovery in global GDP, but I
think the BRIC countries will show surprising resilience and I
think that the decline in the dollar against hard assets will
maintain copper's upward trend," Delta Global Advisors' Pento
said.

TIED UP

Also lifting sentiment in copper were falling stocks of the
metal in LME warehouses, which at around 266,000 tonnes compare
with levels around 500,000 tonnes in early April.

LME copper has gained about 60 percent in the first half of
this year, driven primarily by Chinese buying for stockpiles.

Aluminum stocks fell 3,525 tonnes but remained near record
levels at around 4.4 million tonnes. However, traders said about
70 percent of this material is tied up -- possibly until next May
-- in financing deals. [ID:nLF699919]

A shortage of aluminum in the near term is one reason why the
metal used in transport and packaging has gained about 15 percent
since the beginning of June.

"There still persists a significant state of supply overhang
in the market irrespective of recent price performance," Barclays
Capital said in a note.

Aluminum MAL3 closed at $1,663 a tonne from $1,630 on
Tuesday. Zinc MZN3 at $1,595 a tonne from $1,545, lead MPB3 at
$1,739 from $1,690 and nickel MNI3 at $16,450 from $15,350 on
Tuesday.

Tin MSN3 was untraded at the close, but bid at $14,500 from
Tuesday's last bid at $14,150. Earlier it rose more than 6 percent
to $15,000.

Worries about nearby supplies of tin have pushed the premium
for cash material over the three-month contract to around $82 a
tonne from a discount of around $40 a tonne mid-June.
Metal Prices at 1825 GMT
Metal Last Change Pct Move End 2008 Ytd Pct

move
COMEX Cu 231.30 5.50 +2.44 139.50 65.81
LME Alum 1665.00 35.00 +2.15 1535.00 8.47
LME Cu 5130.00 160.00 +3.22 3060.00 67.65
LME Lead 1745.00 55.00 +3.25 999.00 74.67
LME Nickel 16299.00 949.00 +6.18 11700.00 39.31
LME Tin 14550.00 -200.00 -1.36 10700.00 35.98
LME Zinc 1590.00 45.00 +2.91 1208.00 31.62
SHFE Alu 13420.00 -15.00 -0.11 11540.00 16.29
SHFE Cu* 40340.00 -470.00 -1.15 23840.00 69.21
SHFE Zin 13400.00 -20.00 -0.15 10120.00 32.41
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Additional reporting by Pratima Desai in London; editing by
Keiron Henderson)