UPDATE 6-Copper hits 10-wk high, lead at recordFri Jul 20, 2007...

UPDATE 6-Copper hits 10-wk high, lead at record
Fri Jul 20, 2007 8:26 PM BST
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By Daniel Magnowski

LONDON, July 20 (Reuters) - Copper touched a 2-1/2-month high on Friday and lead rose to more than double its price at the start of the year as worries about supplies encouraged buying, analysts said.

Metals in general were supported by strong economic growth in major consumer China, which has boosted mining stocks, though shares slipped after China raised interest rates to try to prevent its economy from overheating. [ID:nPEK226575]

At the close, Antofagasta (ANTO.L: Quote, Profile , Research) was up 1.45 percent and Rio Tinto (RIO.L: Quote, Profile , Research) gained 0.3 percent, while the FTSE index .FTSE ended 0.8 percent lower.

Copper for delivery in three months on the London Metal Exchange ended at $8,110 per tonne, up $140, or 1.8 percent, after touching $8,160 -- the highest since May 9.

At the COMEX division of the New York Mercantile Exchange, copper for September delivery peaked at $3.7250 a lb, its highest level since May 7, before settling at $3.7055, up 4.35 cents from Thursday.

"The buying follows on from yesterday's price rises (which were influenced by the very strong Chinese GDP growth data)," analyst Michael Widmer at Calyon said.

"It shows that the markets don't really expect the tightening measures announced this morning in China to make any significant impact."

Lead , which has risen around $1,000 since the start of June, traded up to a record $3,500 a tonne, $160, or 4.8 percent, higher than its closing price on Thursday.

Lead prices have been driven this week to gains of more than 100 percent since the start of the year by an explosion at a refinery in the United States and an investigation into lead pollution that has closed Australian ports.

While last week's blast at Doe Run's Herculaneum refinery may have a short-lived impact, shipping terminal closures in the lead exporting country could bring lasting consequences.

"The rise in lead is fundamentally driven," a European physical dealer said, adding that the market was busier than usual for this time of the year.

Strong copper and lead prices aided zinc , which gained $155, or 4.3 percent, to close at $3,725.

Tin hovered just below the record high of $15,700 it hit on Thursday, ending at $15,445/15,450, up $95.

Strong economic growth in China was bullish for metals as the country needs copper and other raw materials to build modern infrastructure, analysts said.

Chinese annual economic growth surged to an 11-1/2-year high of 11.9 percent in the second quarter, according to government information. [ID:nPEK151924]

"One common factor being supportive for all base metals was the strong GDP growth in China in Q2," analysts at Dresdner Kleinwort said.

Prices have been underpinned by industrial action at key suppliers in Latin America. Traders were watching developments at top producer Chile, after copper giant Codelco said it expected to restart production at its Salvador division on Friday, after striking workers lifted a blockade. [ID:nN20315232]

Aluminium closed at $2,856 per tonne, up $24, after hitting a daily high of $2,870 the, highest since May 22.

Nickel , the key ingredient in stainless steel, gained $1,100, or 3.2 percent, to $35,050.

In industry news, Spain's stainless steel firm Acerinox (ACX.MC: Quote, Profile , Research) reported first-half net profit four times greater than the same period last year. [ID:nL20889848]

(Additional reporting by Anna Stablum in London and Chris Kelly in New York)