METALS-Copper hits 13-month highs on weak dollar, BHP

* Copper breaches critical $3 resistance in New York

* BHP's force majeure for Olympic Dam boosts sentiment

* Aluminium stocks rise, flirt with record high
(Recasts, updates prices, market activity; adds second byline, dateline,
previously LONDON)

By Barani Krishnan and Rebekah Curtis

NEW YORK/LONDON, Oct 21 (Reuters) - Copper prices surged more than 3
percent to 13-month highs on Wednesday, reaching above $3 per pound in New
York, as the dollar weakened and BHP Billiton declared force majeure at the
world's fourth-largest copper mine.

Copper futures for December delivery HGZ9 settled up 10.40 cents, or 3.6
percent, at $3.0360 a lb on the New York Mercantile Exchange's COMEX division.
U.S. copper last traded above $3 a lb in September 2008.

Three-month copper on the London Metal Exchange MCU3 ended at $6,590 a
tonne, up from Tuesday's close of $6,416. The metal used in power and
construction touched a 13-month high of $6,600 a tonne earlier.

BHP's (BHP.AX) (BLT.L) declaration of force majeure reinforced concerns
about supply. Also boosting copper prices, mining giant Freeport-McMoRan
(FCX.N) reported strong quarterly earnings.

Copper and other commodities staged a broad rally as the dollar fell below
the critical $1.50 level against the euro.

"What the euro did is the big story for all commodities today," said
Matthew Zeman, copper analyst and head of commodities trading at LaSalle
Futures Group in Chicago.

"Copper has been testing this $3 level for some time and decisively broke
through it after the euro got through the $1.50 level," Zeman said.

BHP announced the force majeure at its Olympic Dam mine in Australia, the
world's fourth largest for copper, crippled by a runaway skip that took out its
Clark shaft's operation. [ID:nSYD244674]

Copper losses at Olympic Dam could slash global supplies this year,
analysts said. COMMODITYPOLL01

"The market will lose about 70,000 tonnes of copper," said David Wilson,
analyst at Societe Generale.

Another bullish factor could be a strike at BHP's Spence copper mine in
Chile. [ID:nN20441513]

But a signal from China that it may gradually unwind its ultra-loose
monetary policy could be bearish. [ID:nPEK212984]

Also weighing on sentiment, stocks of copper in LME warehouses have risen
above 360,000 tonnes, the highest since mid-May, up more than 50 percent since
the middle of July. MCU-STOCKS

"(Physical) demand is not there yet," said Andrey Kryuchenkov, analyst at
VTB Capital. "We need some sustained draws in stocks."

ALUMINIUM STOCKS FLIRT

LME aluminium MAL3, used in transport and packaging, ended up $53 at
$1,966 a tonne despite stocks of the metal nearing all-time highs.

LME aluminium inventories climbed 9,050 tonnes, flirting with a record high
above 4.6 million tonnes. MAL-STOCKS

Analysts say the metal has been able to rally because there is a scarcity
of aluminum for immediate delivery, as about 70 percent of LME inventories were
tied up in financing deals and will not be physically available until May
2010.

Zinc MZN3 touched $2,184 a tonne on the LME, its highest level since late
May 2008, on concerns about supplies from No. 2 zinc miner Peru
[ID:nN20451148]. The metal, used for galvanising steel, ended up $107 at $2,235
a tonne.

In other LME metals, battery material lead MPB3 touched $2,450 a tonne,
its highest price since Sept 9, and ended up $146 at $2,445.

Stainless ingredient nickel MNI3 rose to $885 to settle at $19,735 a
tonne, after hitting a two-month high at $19,750.

Tin MSN3 climbed $50 to finish at $14,450 a tonne.

LME prices at 1610 GMT:
Metal Last Change Pct Move End 08 Ytd Pct move
Alum 1965.00 52.00 +2.72 1535.00 28.01
Cu 6560.00 144.00 +2.24 3060.00 114.38
Lead 2440.00 141.00 +6.13 999.00 144.24
Nickel 19575.00 725.00 +3.85 11700.00 67.31
Tin 14385.00 -15.00 -0.10 10700.00 34.44
Zinc 2225.00 97.00 +4.56 1208.00 84.19
SHFE Alu 14965.00 -85.00 -0.56 11540.00 29.68
SHFE Cu* 50030.00 -180.00 -0.36 23840.00 109.86
SHFE Zin 16205.00 -35.00 -0.22 10120.00 60.13
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Editing by David Gregorio)