METALS-Base metals rally to multi-week highs as dlr sinks
* Investors look at bullish stocks detail
* China demand still robust
* Regional U.S. manufacturing brightens economic outlook (Changes headline, recasts with New York closing copper price, adds New York dateline/byline and analyst comments)
By Chris Kelly and Pratima Desai
NEW YORK/LONDON, Feb 16 (Reuters) - Copper led a rally across the broader base metals complex on Tuesday, hitting its highest level in more than two weeks, as the dollar stumbled and markets recovered from last week's sell-off.
"I think we are still seeing some residual demand from last week," said Catherine Virga, senior base metals analyst with CPM Group in New York.
"We are pulling up from that correction. We are seeing an uptick in physical demand across the metals due to the lower prices."
On the London Metal Exchange (LME), aluminum peaked at $2,138 a tonne, its highest level since Feb. 3, and nickel soared to a seven-month high of $20,345 a tonne.
Copper for three-month delivery in London MCU3 closed at $7,144 a tonne, up from $6,870 at the close on Monday. The metal used in power and construction hit a session high of $7,138 a tonne, the highest since Jan. 28.
On the New York Mercantile Exchange's COMEX division, benchmark copper for March delivery HGH0 rallied 13.9 cents, or 4.5 percent, to finish at $3.2215 per lb, its highest level on a closing basis since Jan. 27.
The euro had its biggest one-day gain versus the dollar since the end of November, as traders bet the single currency had slipped too far over fiscal worries about Greece. [FRX/]
A weaker U.S. currency makes dollar-priced commodities cheaper for holders of other currencies.
Regional manufacturing data from the United States brightened the economic outlook and bolstered the bullish momentum in the metals, analysts said. [ID:nN16372747]
Demand growth for commodities has, for some years now, been led by emerging economies such as China, the world's largest consumer of industrial metals, which is expected to grow by more than 11 percent in the first quarter. [ID:nTOE6130AF]
Chinese markets are due to reopen next week after this week's New Year break.
"The demand picture out of China is still robust," said Daniel Smith, an analyst at Standard Chartered.
"Once China comes back from the New Year holidays things will pick up and this rebound is an anticipation of that."
Stocks of copper in LME warehouses stand at 549,900 tonnes, their highest since October 2003. That is a negative, but the market is looking at canceled warrants -- material already earmarked for delivery.
Copper canceled warrants at above 16,000 tonnes from 3,625 tonnes on Feb. 8 are mostly concentrated in Korea, and analysts say this material is probably heading for China.
Canceled warrants on aluminum are at 295,175 tonnes versus 256,550 on Feb. 8, a small number compared to stocks near record highs at above 4.587 million tonnes.
But in the context of financing deals, which have tied up much of aluminum stocks, they are significant, analysts said.
Aluminum MAL3, used in transport and packaging, closed at $2,131 a tonne from Monday's close of $2,054, while stainless steel material nickel MNI3 closed at $20,325 from $19,350.
Stocks of nickel fell to 164,856 tonnes on Feb. 15 from 166,356 on Feb. 10. Nickel prices over the same period are up about 10 percent.
Material tagged for delivery nearly doubled to 5,460 tonnes on Feb. 15, from 2,394 on Feb 8. Most of the new canceled nickel warrants were in Singapore.
Battery material lead closed at $2,298 a tonne from Monday's last bid at $2,180, jumping nearly 6 percent to hit an intraday high of $2,308.75, its highest in nearly a month.
Zinc MZN3 was at $2,337 from $2,200 on Monday, and rose over 6 percent to hit a late-session high of $2,346. Tin MSN3 was last quoted at $16,700/16,725 from $16,495. Metal Prices at 1953 GMT Metal Last Change Pct Move End 2009 Ytd Pct
move COMEX Cu 322.10 13.85 +4.49 334.65 -3.75 LME Alum 2137.00 83.00 +4.04 2230.00 -4.17 LME Cu 7145.00 275.00 +4.00 7375.00 -3.12 LME Lead 2285.25 152.25 +7.14 2432.00 -6.03 LME Nickel 20270.00 920.00 +4.75 18525.00 9.42 LME Tin 16700.00 205.00 +1.24 16950.00 -1.47 LME Zinc 2327.00 127.00 +5.77 2560.00 -9.10 SHFE Alu 16825.00 185.00 +1.11 17160.00 -1.95 SHFE Cu* 56410.00 1020.00 +1.84 59900.00 -5.83 SHFE Zin 18345.00 270.00 +1.49 21195.00 -13.45 * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Rebekah Curtis in London; Editing by James Jukwey; Editing by David Gregorio)