* China domestic and export demand pick up
* Fed rate rises would suggest strong U.S. growth
* Supply disruptions support sentiment
By Pratima Desai
LONDON, March 1 Copper prices rose to their
highest in more than a week on Wednesday as manufacturing data
from top consumer China showed potential for strong demand,
reinforcing worries about shortages due to supply disruptions.
Benchmark copper on the London Metal Exchange ended
up 0.7 percent at $6,016 a tonne from an earlier $6,090, its
highest since Feb. 21.
Factory activity in China expanded faster than expected in
February as domestic and export demand picked up, adding to
signs that the global economy is gaining momentum even as fears
grow of a surge in trade protectionism.
"Chinese data is definitely a reason to be bullish on
industrial metals," Commerzbank analyst Eugen Weinberg said.
"If the Fed goes for more rate hikes (than expected) this
year, then it's due to underlying economic dynamics proving to
be more positive than expected, which is a good thing."
But prices were capped by a stronger U.S. currency, which
when it rises makes dollar-denominated commodities more
expensive for non-U.S. firms, potentially weakening demand.
The dollar hit its highest in seven weeks as comments from
two influential Federal Reserve policymakers were interpreted to
mean that U.S. rates could rise at the March meeting.
However, supply disruptions in Indonesia and Chile are a
positive for copper.
Freeport-McMoRan's inability to export copper
concentrate since mid-January and a strike at BHP Billiton's
Escondida mine in Chile - the world's largest -
last month pushed copper to 21-month highs of $6,204 a tonne.
"Potential mine supply disruptions are not the only factors
supporting higher prices. The demand backdrop for copper should
strengthen this year as well," UBS analysts said in a note.
"We expect global economic growth to accelerate, driven by
firmer industrial production. With global economic activity
improving, copper demand is likely to expand towards 3.7 percent
this year from 3 percent last year.
Three-month aluminium rose 1.3 percent to $1,949 a
tonne from an earlier $1,957, its highest since May 2015.
Aluminium's gains have been fuelled by China ordering
aluminium producers in 28 cities to slash output during the
winter months as Beijing intensifies its war on smog.
China accounts for nearly 60 percent of the world's
aluminium production estimated at more than 60 million tonnes
Zinc gained 1.3 percent to $2,862, lead
rose 2.1 percent to $2,305.5, tin was up 1.6 percent to
$19,525 and nickel added 0.5 percent to $11,030.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
(Editing by Louise Heavens and David Evans)