METALS-Copper rises after hours, Fed sees stable economy

* Copper adds to robust close after U.S. Federal Reserve news

* Fed lets interest rates alone, sees economic stability

(Recasts with Fed news, updates prices, changes byline, dateline
previous LONDON)

By Carole Vaporean

NEW YORK, Aug 12 (Reuters) - Copper prices added to robust
closing levels in Wednesday's after-hours trade as an encouraging
U.S. Federal Reserve statement prompted buyers to take prices back
near session highs.

As expected, the Fed kept its overnight rate target between zero
and 0.25 percent, but it also extended a program to buy longer-term
government securities until the end of October. [ID:nN12136106]

"It was more that there wasn't anything in it that would make a
change in interest rates," said Mo Ahmadzadeh, president of Mitsui
Bussan Commodities (USA) Inc in New York.

U.S. copper futures for delivery in September HGU9 surpassed
closing levels at $2.8235 a lb on the New York Mercantile Exchange's
COMEX division, advancing 9.10 cents, or 3.33 percent, to $2.8275 a
lb in late dealings.

Earlier, the contract raced up to $2.8345 per lb, falling
short of Monday's 10-month peak at $2.8465, as dealers waited
for positive economic news to come from the Fed's policy statement.

When the Fed's outlook came in as expected, players with
uncovered short positions tried to pull prices off their highs, but
buyers would not be dissuaded from a positive reading of the Fed's
economic outlook.

"There are bids under the (copper) market. There's pricing
to be done for August that hasn't been done because we've been
in an up month. People are looking for copper to break down.
And, it's not," said Ahmadzadeh.

On the London Metal Exchange, three-month copper MCU3
ended at $6,190 a tonne, from $6,030 a tonne on Tuesday, but
rallied up to $6,216 a tonne in post Fed statement trading.

The metal used in power and construction also hit a
10-month high of $6,258 a tonne on the LME on Monday.

"The positive sign for the base metals is that the Fed will
indefinitely continue its accommodative policy, with no indication
it will pull in the reins," said Bill O'Neill, managing partner at
Logic Advisors in New Jersey.

The policy setting arm also said that "information received
since the Federal Open Market Committee met in June suggests that
economic activity is leveling out."

Looking at rising energy and commodities prices, the Fed added
that substantial resource slack is likely to dampen cost pressures,
and the Committee expects inflation to remain subdued for some
time.

The FOMC is, "validating what the economic data as late has
shown. The Fed essentially signaled to the market that this
recession is over by changing its tone from contraction to
leveling out," said Burt White, chief investment officer at LPL
FINANCIAL in Boston.

ALUMINIUM

Also in after-hours business, aluminium prices MAL3 held at
$1,980 a tonne, near earlier highs at $1,987 a tonne, supported by
expectations of stronger auto sector demand.

Also behind the recent aluminium price surge -- up about 50
percent since April -- are financing deals tying up about 70
percent of stocks in LME warehouses until May. [ID:nLL175677]

LME nickel MNI3 was last bid at $19,880 a tonne, up from its
close at $19,800 a tonne. Zinc MZN3 moved up to $1,870 a tonne
after ending $1,851 a tonne, lead MPB3 closed at $1,850 then
advanced to $1,867 in late business, and tin MSN3 was last bid at
$14,900 a tonne, up from $14,800 at session end.

Metal Prices at 1638 GMT
Metal Last Change Pct Move End 2008 Ytd
Pct
move
COMEX Cu 276.90 3.55 +1.30 139.50
98.49
LME Alum 1980.00 50.00 +2.59 1535.00
28.99
LME Cu 6210.00 180.00 +2.99 3060.00
102.94
LME Lead 1860.00 60.00 +3.33 999.00
86.19
LME Nickel 19800.00 350.00 +1.80 11700.00
69.23
LME Tin 14800.00 50.00 +0.34 10700.00
38.32
LME Zinc 1860.00 45.00 +2.48 1208.00
53.97
SHFE Alu 14890.00 -285.00 -1.88 11540.00
29.03
SHFE Cu* 47720.00 -880.00 -1.81 23840.00
100.17
SHFE Zin 14750.00 -320.00 -2.12 10120.00
45.75 ** 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 Michael Taylor, Pratima Desai, Martina
Fuchs and Stephen James; Editing by Marguerita Choy)