US copper rallies above $1.50/lb as indexes rejig

NEW YORK, Jan 6 (Reuters) - Copper surged to a one-month high above $1.50 a lb in New York futures trade on Tuesday as the early-2009 buying momentum gathered pace amid economic stimulus optimism and an annual portfolio rebalancing by index funds.

For detailed report on global copper markets, click on [MET/L]

* Copper for March delivery HGH9 rallied 12.40 cents, or 8.5 percent, to settle at $1.5830 a lb on the New York Mercantile Exchange's COMEX division.

* Session range $1.45 to $1.5850, its loftiest level since Dec. 3.

* COMEX estimated volume at 15,442 lots by 12 p.m. EST (1700 GMT). Final volume on Monday reached 12,855 lots.

* Open interest rose by 709 lots to 75,285 contracts open as of Jan. 5.

* Since its late-December low at $1.2550, the benchmark March contract is up more than 26 percent.

* Index fund reweightings seen giving more support to the industrial metals complex based on cheaper valuations and opportunities for rapid growth - Tom Hartman, broker with Altavest Worldwide Trading in Mission Viejo, California.

* Copper's early-2009 rally rooted in investor optimism surrounding planned U.S. stimulus package - Matthew Zeman, head of trading, LaSalle Futures Group in Chicago.

* U.S. President-elect Barack Obama, seeking as much as $310 billion in tax cuts, is proposing that about 40 percent of the package worth up to $775 billion be in the form of tax breaks. [ID:nN04350872].

* Copper price surge bucks bearish economic data from the U.S. housing and service sectors that reinforced fears of deepening recession. [ID:nL676872]

* Copper up despite ongoing strength in the U.S. dollar.

* The dollar rallied for a third straight session on Tuesday, boosted by more signs of economic weakness in the euro zone that could prompt its central bank to slash interest rates further. [USD/]

* London Metal Exchange-monitored copper warehouse stocks added another 1,450 tonnes on Tuesday, bringing total levels to 343,500 tonnes -- the highest level since Feb. 2004.

* COMEX copper stocks went up 65 short tons to 34,579 short tons as of Monday.

* Mitsubishi Materials Corp (5711.T) said it had won a roughly 70 percent hike in copper processing fees from Freeport-McMoran Copper & Gold (FCX.N), in what is believed to be the first fee rise won by a Japanese copper smelter for 2009. [ID:nT23206]

* London Metal Exchange copper for three months delivery MCU3=LX closed up $200 at $3,390 a tonne. After the close, the metal rallied further touching $3,480, its highest level since Dec. 3. (Reporting by Chris Kelly)