METALS-Aluminium at 11-wk High, U.S. Data Supports

LONDON, July 30 -- Aluminium rose to an 11-week high on Friday due to industrial consumer buying, while copper reversed losses to hit a fresh three month high after a flurry of economic data in the United States.

Copper is on course for its biggest monthly gain in about one year, thanks to improved risk appetite.

At 1512 GMT, copper CMCU3 for three-months delivery on the London Metal Exchange traded at $7,295.50 a tonne, versus $7,231, but earlier hit a level not seen since May 4 at $7,307.

The metal, used in construction and wiring, is set for a more than 10 percent rise in July from a month earlier.

Aluminium CMAL3 rose to $2,162 a tonne, its highest since May 14, and was last up at $2,156.50 a tonne from $2,093.

"Aluminium below $2,000 is a bargain," said Eugen Weinberg, an analyst at Commerzbank. "The marginal production costs are above $2,200, and if you don't expect a massive slowdown of the Chinese economy, current prices are still a good long-term opportunity."

Analysts said there was decent buying in Europe as consumers took advantage of a stronger euro EUR=, which has been rising since early June and climbed above $1.31 briefly on Thursday.

Recent aluminium production and stocks data also looked bullish for aluminium, analysts said.

Western world unwrought aluminium stocks fell to 1.192 million tonnes in June from a revised 1.306 million tonnes in May, industry data showed on Monday. 

Metal traders told Reuters this week that Deutsche Bank was preparing to follow the world's top aluminium producer, Russia's UC RUSAL (0486.HK: Quote), which has said it is considering an aluminium ETP. 

Such a move could tighten the aluminium market, where inventories are still close to the record highs of 4.6 million tonnes in January, but around 75-80 percent of them are estimated to be tied up in financing deals. 

"ETFs are indeed able to change the aluminium market completely," said Weinberg. 
 
U.S. DATA RELEASES

Late on Friday, a U.S. government report on the world's largest economy showed that economic growth slowed in the second quarter. 

But boosting base metals' prices was well-received U.S. consumer and Midwest business activity data.
 
"You had a slight disappointment in terms of the GDP numbers," said Daniel Major, analyst at RBS Global Banking & Markets. "But then upside on the Chicago PMI and Michigan confidence.

"We're seeing a bit of fragmentation, but it's encouraging to see the forward looking indicators beating expectations."

Also on the overall outlook, analysts added that a positive set of results from global miner Anglo American (AAL.L: Quote) was a supportive factor for base metals. 

Traders are also watching data from China, the world's top copper consumer.

China's official PMI is likely to have eased to a 17-month low in July as policies to curb lending and rein in the property market weigh on manufacturing. For a preview, click on:

LME copper stocks rose by 1,975 tonnes on Friday, but the ratio of cancelled warrants, or materials tagged for delivery, stood at 7.9 percent, indicating active demand.

Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 8 percent from a week earlier, the exchange said.

Battery material lead CMPB3 traded at $2,080 a tonne, versus $2,050 a tonne, after earlier touching its highest peak since May 11 at $2,081.

Tin CMSN3 traded at $19,625 a tonne from $19,600, while nickel CMNI3 traded at $20,934 from $20,675 a tonne.

Zinc CMZN3 traded at its highest level in two and a half months at $2,013 a tonne from Thursday's $1,990 a tonne.