Off The Wire
METALS-Copper hits highest in a week on Chinese hopes, soft dollar
* Zinc touches lowest since April 2 on supply worries
* Adds analyst comment, updates prices, changes dateline from SINGAPORE)
By Eric Onstad
LONDON, April 9 (Reuters) - Copper touched a one-week high on Tuesday and other base metals also gained on speculative buying fuelled by technical signals, optimism about a rebound in China's economy and a weaker dollar.
Zinc, however, extended its decline on worries about rising supply from Chinese smelters ramping up output.
"It seems that the macro picture in China has improved recently, and also the market seems to think that the dollar might come off a bit in the days ahead," said Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan.
Driving the upswing in prices were Commodity Trading Advisor funds which mainly use technical signals such as momentum, while macroeconomic funds were wary and on the sidelines, Torlizzi added.
"The market is still a bit tricky. Everybody's long, but things may change pretty quickly. It's too early to think a bull run has begun for the base metals."
Benchmark copper on the London Metal Exchange was up 0.7 percent by 1015 GMT at $6,517 a tonne, the highest since April 1.
* COPPER SPREAD: The discount of cash LME copper to the three-month contract closed at $15.25 a tonne on Monday, near the previous level that was the biggest discount for nearly two months, indicating healthy supplies.
* ZINC SMELTERS: LME zinc shed 1.6 percent to $2,860 a tonne after hitting its weakest since April 2, weighed down by fears refined zinc supplies will surge after smelters and miners agreed to a sharp rise in treatment and refining charges.
"Current profits for the smelters are very high. This will push smelters to increase their utilisation rate," said Dina Yu, an analyst at metals consultants CRU in Beijing, adding that Chinese smelters are earning record profits of as much as 3,000 yuan ($447) a tonne.
* ZINC STOCKS: On-warrant LME zinc inventories have gained 18 percent to 47,925 tonnes since touching record lows in late March, daily LME data showed on Tuesday.
* DOLLAR: The market got support after the dollar slipped for a second day against a basket of currencies , making dollar-denominated base metals cheaper for buyers paying in other currencies.
* STEEL/NICKEL: Nickel, mainly used in stainless steel, received a boost after Chinese steel rebar futures hit their highest since 2011 amid increased demand from the construction sector. LME three-month nickel rose 0.6 percent to $13,265 a tonne.
* PRICES: LME aluminium added 0.5 percent to $1,879.50 a tonne, while lead gained 0.8 percent to $2,007 and tin advanced 0.6 percent to $20,950.
(Additional reporting by Mai Nguyen in Singapore; Editing by Dale Hudson)Reuters Messaging: firstname.lastname@example.org))
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