METALS-Copper buoyed by stimulus hopes before ECB meet

* LME aluminium, lead hit multi-month highs
* Shanghai copper rises to 56,460 yuan, highest since
mid-May
* LME copper may rise towards $7,824/T - technicals
* Coming up: ECB rate decision; 1145 GMT

(Adds details; updates prices)
By Rujun Shen
SINGAPORE, Sept 6 (Reuters) - Shanghai copper rose to its
highest in more than three months on Thursday, while London
prices held near a 1-1/2-month top on hopes the European Central
Bank will unveil a new plan to combat surging borrowing costs in
indebted euro zone states.
Leaks before the meeting gave investors confidence that the
ECB will launch a new bond-buying plan, spurring appetite for
riskier assets and sending London copper to $7,749 a tonne, a
hair off 1-1/2-month high hit on Wednesday.
But analysts and traders were sceptical about whether any
action by the ECB would have a long-lasting effect on prices of
industrial metals, given their weak fundamentals.
"In the short term, decisive actions by the ECB will boost
copper prices, but the medium-to-long term fundamentals will
weigh on market sentiment," said Zhang Ao, an analyst at
Minmetals Futures in the southern Chinese city of Shenzhen.
Zhang said the 250-day moving average near $7,900 is a key
resistance level for London copper.
Three-month copper on the London Metal Exchange
pared earlier losses to trade almost flat at $7,733.25 a tonne
by 0701 GMT.
The most-traded December copper contract on the Shanghai
Futures Exchange rose to as high as 56,460 yuan
($8,900) a tonne, its loftiest since May 14, before easing to
close at 56,220 yuan.
Copper prices found support from reports that China, the top
consumer of copper, has approved 25 rail projects that could be
worth more than 700 billion yuan ($110.3 billion) in the latest
measure to stimulate growth of the world's No.2 economy.

China's downturn probably worsened in August, according to a
Reuters poll that foresaw factory output hitting a 39-month low
and investment growth flattening, while quickening inflation was
seen complicating Beijing's choices for boosting the economy.

According to technical charts, LME copper could rise to
$7,824 a tonne during the day, Reuters market analyst Wang Tao
said.

Though LME copper stocks have dropped for six sessions
straight on Sept. 5, hitting their lowest level since October
2008, traders said demand for the industrial metal on the
physical market remained sluggish. MCU-STOCKS
"There is very little demand when prices rise above 56,000
yuan," said a Shanghai-based trader. "The premium on imported
copper is only about $50, reflecting low buying interest."
The ratio of cancelled warrant -- material earmarked for
delivery -- to total LME stocks stood at a two-month low of
14.16 percent.
Investors will also closely watch the U.S. non-farm payrolls
data due Friday, which is expected to shed light on whether the
Federal Reserve will announce further stimulus measures at its
policy meeting next week.
LME aluminium rose to a two-month high of $1,983.75.
LME lead hit $2,035.75, its highest since mid-May.

Base metals prices at 0701 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7733.25 -6.75 -0.09 1.75
SHFE CU FUT DEC2 56220 490 +0.88 1.55
HG COPPER DEC2 352.25 -0.65 -0.18 2.52
LME Alum 1984.25 12.25 +0.62 -1.77
SHFE AL FUT DEC2 15640 140 +0.90 -1.29
LME Zinc 1893.00 2.00 +0.11 2.60
SHFE ZN FUT DEC2 14970 175 +1.18 1.18
LME Nickel 16123.00 23.00 +0.14 -13.83
LME Lead 2036.00 8.00 +0.39 0.05
SHFE PB FUT 15425.00 215.00 +1.41 0.92
LME Tin 19703.00 3.00 +0.02 2.62
LME/Shanghai arb^ 1098
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month
($1 = 6.3492 Chinese yuan)

(Editing by Himani Sarkar)