METALS-Copper hits 4.5-month high as BOJ adds to stimulus rally

* LME aluminium stocks eye record highs above 5MT
* BOJ eases policy, boosts metals
* U.S. Building permits Aug at 1230 GMT

(Adds quotes, detail, updates prices)
By Melanie Burton
SINGAPORE, Sept 19 (Reuters) - Copper hit its highest since
May on Wednesday after the Bank of Japan followed the U.S.
Federal Reserve and eased monetary policy, but the gains were
seen as short-lived as traders reported fading interest from top
consumer China.
The BOJ boosted its asset purchases by double the usual
amount as slowing global demand and mounting tensions with China
have hurt chances of a near-term recovery in the export-reliant
economy. [I D :nL4E8KJ05L]
Investors had been searching for fresh catalysts after last
week's sharp boost to asset prices inspired by the Fed's
stimulus, known as quantitative easing (QE).
Traders said the BOJ's move had boosted price expectations
for metals, which tend to rise in value as paper currency
depreciates, while the price rise also forced shorts to cover as
trading in Europe began.
"It's just one big global competition to see who can out QE
the other now," said a trader based in Singapore.
Copper prices, however, were set to consolidate this week,
as the market digests the impact of easing on the global economy
and eyes economic data for any proof of a pick-up in growth,
said Melbourne-based commodity analyst Natalie Robertson at ANZ.
"We could see more consolidation this week. Copper at $8,500
a tonne in this environment is probably a bit overdone," she
said.
"On the ground activity in China is still pretty weak, with
industrial production falling below 9 percent in August. Looking
ahead we've got the Chinese holidays in October while the
leadership transition will probably keep a lid on prices."
Three-month copper on the London Metal Exchange
climbed 1.24 percent to $8,422 a tonne by 0703 GMT, which was
its highest since May 2, recovering f r om the previous session
when it edged down 1 percent.
Prices this week had lost momentum after copper's biggest
single-day rally since June on Friday.
China is the world's top copper consumer, accounting for 40
percent of refined demand but political uncertainty ahead of a
once-in-a-decade leadership change has discouraged Chinese
industry from cementing new projects, traders said.
The most-traded January copper contract on the Shanghai
Futures Exchange rose 1.56 percent to 60,150 yuan
($9,500) a tonne.
"After last week's QE3 announcement by the Fed, we think the
market's focus is shifting from monetary policy to hard economic
data. In this context, today's U.S. housing data will be closely
watched," Credit Suisse said in a research note.
Building permits for August are due at 1230 GMT.
Worries about Spain also curbed gains. Investors on Tuesday
piled pressure on Spain to request aid and trigger a European
Central Bank bond-buying programme seen as inevitable to help
the country finance its debts.

ALUMINIUM RECORDS
Traders predicted LME aluminium stocks may hit a record high
this week as trade shorts deliver metal against the expiring
September contract instead of paying spiralling costs to roll
the position forward.
LME aluminium stocks are around 50,000 tonnes short of
record highs of 5.126 million tonnes reached in February, having
surged by 225,000 tonnes since Sept. 9 to 5.079 million tonnes.
MALSTX-TOTAL
Global stocks of aluminium have climbed since the 2008
credit crisis due to anaemic industrial demand and as increased
use of the metal by banks as a financing tool raises physical
premiums and encourages smelters to overproduce.
Fourth-quarter aluminium premiums to Japanese buyers, Asia's
biggest importers of the metal, rose 24 percent from the
previous quarter to a record high of $254-$255 a tonne.

Shortdated futures spiked to $40 on Tuesday, the highest in
more than seven years, before easing to $12 on Wednesday.
CMALT-0
PRICES

Base metals prices at 0703 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8422.00 103.00 +1.24 10.82
SHFE CU FUT JAN3 60520 930 +1.56 9.32
HG COPPER DEC2 383.80 5.10 +1.35 11.70
LME Alum 2182.00 22.00 +1.02 8.02
SHFE AL FUT DEC2 15855 90 +0.57 0.06
LME Zinc 2146.00 38.00 +1.80 16.31
SHFE ZN FUT JAN3 15885 210 +1.34 7.37
LME Nickel 18076.00 256.00 +1.44 -3.39
LME Lead 2298.25 24.25 +1.07 12.94
SHFE PB FUT 16150.00 140.00 +0.87 5.66
LME Tin 21560.00 -35.00 -0.16 12.29
LME/Shanghai arb^ 1755

Shanghai and COMEX contracts show most active months
($1 = 6.3189 Chinese yuan)

(Reporting by Melanie Burton; Editing by Miral Fahmy)