diggers and dealers momentum will see plus 30c, page-12

* Fund money flowing into base metals

By Chris Kelly and Pratima Desai

NEW YORK/LONDON, Aug 5 (Reuters) - Copper prices scaled new
10-month highs on Wednesday, as investors continued to bid prices
up amid expectations of stronger global economic growth and
demand.

Expectations of rising demand from auto makers and a shortage
of material for nearby delivery drove aluminum to $2,115 a tonne,
its highest since last November, while nickel leapt to $20,410, a
level last seen in August 2008.

Copper for September delivery HGU9 on the New York
Mercantile Exchange's COMEX division ended up 1.65 cents at
$2.8120 a lb, after dealing between $2.7490 and $2.8385, a new
high dating back to early October.

Three-month copper MCU3 on the London Metal Exchange hit
$6,235 a tonne, the highest since last October and ended bid at
$6,199, up $149 from Tuesday's close.

Prices of the metal used in power and construction have
doubled so far this year.

Deutsche Bank analyst Joel Crane cited increased sentiment
that the world is coming out of recession much faster than
originally anticipated as a key factor in the run-up.

"Until that (economic optimism) trade slows down, until I see
evidence that fund money is going to slow down entering the
complex, I don't expect a turnaround in sentiment at least in the
very near term," he said.


Also behind this week's gains was news that U.S. auto sales
jumped to their highest level in 2009 in July as Americans rushed
to take advantage of the government's "cash for clunkers" program.
[ID:nN03530480]

"It looks as if the worst hit sectors -- autos and
construction -- in the United States may be on the brink of
recovery," a trader said.

Stainless steel ingredient nickel MNI3 ended at $20,450 a
tonne from Tuesday's final $19,375 a tonne.

"Stainless steel destocking by distributors has been
subsiding, and this has provided increasing support," Bank of
America said in a note.

"However, distributors have so far not started to re-stock in
significant amounts, though this may change as the economic
recovery unfolds. End user demand remains weak in many countries,
but we expect a rebound through 2010."



Metal Prices at 1850 GMT
Metal Last Change Pct Move End 2008 Ytd Pct

move
COMEX Cu 281.15 2.25 +0.81 139.50 101.54
LME Alum 2055.00 65.00 +3.27 1535.00 33.88
LME Cu 6195.00 145.00 +2.40 3060.00 102.45
LME Lead 1955.00 34.00 +1.77 999.00 95.70
LME Nickel 20300.00 925.00 +4.77 11700.00 73.50
LME Tin 15200.00 250.00 +1.67 10700.00 42.06
LME Zinc 1920.00 67.00 +3.62 1208.00 58.94
SHFE Alu 15200.00 165.00 +1.10 11540.00 31.72
SHFE Cu* 48090.00 270.00 +0.56 23840.00 101.72
SHFE Zin 15195.00 75.00 +0.50 10120.00 50.15
** 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 Martina Fuchs and Nigel Hunt; editing by
James Jukwey and Sue Thomas and Lisa Shumaker)