METALS-Copper jumps to 3-week high on weak dollar, Alcoa

* Dollar slumps; upbeat U.S. data, earnings lift equities

* Zinc hits 15-month peak

* Alcoa posts surprise Q3 profit, boosts recovery hopes
(Changes headline, recasts, adds NEW YORK to dateline, updates with New York
closing copper prices, adds analyst comments)

By Chris Kelly and Rebekah Curtis

NEW YORK/LONDON, Oct 8 (Reuters) - Copper rallied to a three-week high on
Thursday, while zinc hit a 15-month peak as extended losses in the dollar and
improved U.S data and strong earnings from Alcoa renewed bets for an economic
recovery.

Copper for December delivery HGZ9 surged 11.90 cents, or 4.3 percent, to
settle at $2.8985 a lb on the New York Mercantile Exchange's COMEX division,
close to its session high at $2.9010 -- its loftiest level since Sept. 18.

On the London Metal Exchange (LME), copper for three-months delivery MCU3
rose $235 to end at $6,330 a tonne, after hitting a peak at $6,363, another
high dating back to Sept. 18.

"The dollar is a big factor, but also the economic news early in terms of
Alcoa's numbers coming in better and showing some revival in sales is certainly
helping," said Steve Platt, futures analyst with Archer Financial Services in
Chicago.

Alcoa Inc (AA.N), the largest U.S. aluminum producer, reported a surprise
third-quarter profit and forecast global consumption will rise 11 percent in
the second half. [ID:nN08516353]

The news helped boost aluminum MAL3 more than 4 percent to a two-week
high of $1,925 a tonne. Aluminum finished the session up $64 at $1,909.

"The market was surprised by Alcoa's results but if you want a clear
statement look to the dollar... it's terribly weak and everything is responding
accordingly," said Gary Mead, senior commodities analyst at Virtual Metals.

The dollar, perceived as a safe haven, fell broadly as rising equity
markets fueled demand for riskier assets. A weak dollar makes dollar-priced
metals cheaper for non-U.S. investors. [USD/]

On the economic front, worries about stubbornly high unemployment and its
effect on a fledgling economic recovery faded after data showed the number of
U.S. workers filing new claims for jobless insurance fell to a nine-month low
last week. A separate report showed U.S retailers posted their first monthly
sales rise in more than a year. [ID:nN08520274]

In other metals, zinc MZN3 closed up $145 at $2,080 a tonne, after
rallying more than 8 percent to a near 15-month high of $2,100.

"The closure of Minmetal's Century zinc operation, following a leak in the
pipeline transporting concentrate from the mine is continuing to lend support
to prices," said Standard Bank in a note.

Elsewhere, supply fears boosted sentiment in copper.

Macqaurie Bank said earlier this session the world copper market stands to
lose 50,000 tonnes of supply this year and tip back into deficit after a
mechanical failure at Australia's giant Olympic Dam mine cut production
capacity by 80 percent. [ID:nSYD432722]

NERVES LINGER

Prices of copper, used in power and construction, have doubled in value
this year on the back of improved macro-economic data and restocking by China,
the world's top consumer of the metal.

But investors are still nervous about the demand picture as the outlook for
global economic recovery remains uncertain, Chinese buying wanes and other
global economies struggle to pick up the demand slack.

Traders are gearing up for the return of Chinese markets on Friday after
week-long National Day celebrations, and for the start of LME week on Monday,
which will likely set the tone for the metals market outlook for next year.

Battery material lead MPB3 ended at $2,080 from $2,155, having earlier
jumped more than 4 percent to a two-week high of $2,274.75.

Tin MSN3 was last bid at $14,945 from $14,675 and nickel MNI3 closed at
$19,495 from $18,600. Nickel touched $19,500 earlier, its highest since late
August.

Metal Prices at 1844 GMT
Metal Last Change Pct Move End 2008 Ytd Pct

move
COMEX Cu 288.70 11.65 +4.21 139.50 106.95
LME Alum 1910.00 65.00 +3.52 1535.00 24.43
LME Cu 6335.75 240.75 +3.95 3060.00 107.05
LME Lead 2280.00 125.00 +5.80 999.00 128.23
LME Nickel 19325.00 725.00 +3.90 11700.00 65.17
LME Tin 14900.00 225.00 +1.53 10700.00 39.25
LME Zinc 2074.75 139.75 +7.22 1208.00 71.75
SHFE Alu 14835.00 130.00 +0.88 11540.00 28.55
SHFE Cu* 48190.00 1720.00 +3.70 23840.00 102.14
SHFE Zin 15330.00 240.00 +1.59 10120.00 51.48
** 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 Maytaal Angel; Editing by James Jukwey; Editing by
David Gregorio)