copper may surpass $8,000 for first time since

(Adds relative performance in eighth paragraph.)

By Glenys Sim

April 5 (Bloomberg) -- Copper futures in London may advance to more than $8,000 a metric ton this week for the first time since the collapse of Lehman Brothers Holdings Inc. in 2008, buoyed by a revival in demand thats more than doubled prices.

The metal for three-month delivery on the London Metal Exchange touched $7,939.75 a ton on April 1, the highest level since Aug. 1, 2008, when it last traded at more than $8,000. LME trading resumes tomorrow after the Easter holiday.

Coppers revival underscores the rebound of the global economy, which was tipped into the deepest recession since World War II by Lehmans collapse and the freezing of credit markets. The commodity, used in houses and autos, can set the pace for other industrial metals such as nickel and zinc.

We have embedded in our forecasts for copper to go above $8,000 sometime in the second quarter, Yingxi Yu, an analyst at Barclays Capital, said from Singapore today. Coppers had a robust performance and sentiment is still positive, Yu said, citing declining stockpiles and positive economic data.

Former Federal Reserve Chairman Alan Greenspan said yesterday that there is momentum building up in the U.S. economy, the worlds second-largest copper user. Manufacturing in China, the largest user of the metal, grew for a 13th month in March, according to data released on April 2.

Were in the first third of a very strong, sustainable recovery here, Jesper Koll, Tokyo-based head of equity research at JPMorgan Chase & Co., said in a Bloomberg Television interview. Here in Asia, things are growing very fast.

Investors Flee

Copper reached a record $8,940 a ton on July 2, 2008, two months before Lehmans failure. The metal lost 68 percent of its value in the following five-and-a-half months as factories slashed purchases and investors fled commodity holdings.

Government stimulus packages, including Chinas $586 billion program, drove a doubling of prices last year. In 2010, the metal has outperformed the Reuters/Jefferies CRB Index, rising 6.9 percent compared with 2.5 percent drop in the gauge that tracks 19 raw materials. Nickel, used in stainless steel, is up 35 percent this year, while tin has climbed 8.9 percent.

The price risks at the moment are skewed more to the upside than to the downside, said Stefan Graber, an analyst at Credit Suisse Group. $8,000 is an important psychological level. I wouldnt be surprised to see a test of that level, but whether were going to see a break in that, I dont know.

Payrolls Boost

Futures in New York jumped to a 20-month high today after reports last week showed manufacturing expanded in India, the U.S. and Europe, as well as China, and after U.S. payrolls expanded by the most in three years. The May-delivery contract gained 1.1 percent to $3.6235 a pound at 2:20 p.m. in Singapore.

Inventories tallied by the LME have fallen 7.7 percent since reaching a six-and-a-half-year high in February. They stood at 512,757 tons on April 2. Stockpiles in Shanghai fell for a second week last week from the highest since at least 2003.

Copper may rise this week as stronger manufacturing figures feed speculation demand is improving, according to a Bloomberg survey published April 2. Eleven of 20 analysts, investors and traders in the survey, or 55 percent, said the metal will climb, while eight forecast lower prices and one expected little change.

The trading direction in copper this week will come from what people say at Cesco, said Barclays Capitals Yu, referring to an annual gathering in Chile. Traders, investors and executives are meeting in Santiago at metals conferences, including a dinner organized by Chilean research group known as Cesco, or the Center for Copper and Mining Studies.

Prices are almost double the level that copper was trading at before Cesco last year, while stockpiles are also much higher, said Macquarie Group Ltd. analysts including Jim Lennon. Information that demand is improving will be a focus of the market at Cesco, Lennon wrote in an April 2 report.

--With reporting by Chanyaporn Chanjaroen in London and assistance from Haslinda Amin in Hong Kong. Editors: Jake Lloyd- Smith, Matt Oakley