US copper at 16-mth high, Shanghai stockpiles dip

NEW YORK, Dec 28 (Reuters) - U.S. copper prices hit
16-month highs Monday, pushed up by lower inventories of the
metal on the Shanghai futures exchange and a weaker U.S. dollar
amid light, holiday-crimped trading.

For detailed report on global copper markets, click on
[MET/L]

* Benchmark copper for March delivery HGH0 up 3.65 cents,
or 1.1 percent, ar $3.3290 lb by 9:45 a.m. EST (1445 GMT) on
the New York Mercantile Exchange's COMEX division.

* Range from $3.2800 to $3.3395, the contract's loftiest
level since Aug. 27, 2008.

* "The lower inventories in Shanghai and the weaker dollar
is lifting things this morning. That said, in this kind of very
light trading volume environment, any positive news, including
the encouraging economic data lately, could lead to outsized
price moves." - Matthew Zeman, head of trading with LaSalle
Futures Group in Chicago.

* Supply threats in South America also supported prices.
Some 274 union workers at the 232,000-tonne-per-year Altonorte
copper smelter in Chile planned to strike and block roads on
Monday, after scrapping a final wage offer from global miner
Xstrata (XTA.L).

* Nearly 3,000 union workers at Chile's Chuquicamata mine
complex, which produces around 4 percent of the world's copper,
were to vote on whether to accept a final wage offer from
state-owned Codelco [CODEL.UL]. [ID:nN27159011]
[ID:nN27132980]

* Deliverable copper inventories in warehouses monitored by
the Shanghai Futures Exchange fell to 96,362 tonnes from
104,377 tonnes a week ago, while stocks on warrant declined
11,892 tonnes to 30,609 tonnes. It was a departure from a trend
on the Shanghai exchange in recent months, where stockpiles of
copper had risen almost sixfold since 2005. <0#SGH-STOCKS>

* Benchmark third-month Shanghai copper SCFc3 rose 630
yuan, or 1.1 percent, to 58,260 yuan a tonne by the close and
earlier hit 58,890 yuan, its highest since early September
2008. April, the more-active fourth month, hit a high of 59,180
yuan, up 2.3 percent on the day, with the market on course for
a rise of almost 150 percent in 2009.

* London Metal Exchange inventories, at 484,800 tonnes,
have risen 42 percent this year, and will hit their highest
year-end levels since finishing 2002 at more than 850,000
tonnes.

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* The London Metal Exchange remained shut Monday for the
Christmas holidays, and will reopen Tuesday. LME copper rallied
to $7,167 on Christmas Eve, $3 shy of a 16-month peak. Since
Thursday, Shanghai copper has risen 2 percent, indicating that
LME prices could rally towards $7,300 this week, if the gains
in Shanghai held.
(Reporting by Barani Krishnan; Additional reporting by Nick
Trevethan in Singapore; Editing by Walter Bagley)