METALS-Copper rises as inventories plunge to decades-low

(Updates prices, adds quotes)

By Mai Nguyen

Oct 19 (Reuters) - Copper prices rose on Tuesday, buoyed by decades-low supplies and an extreme shortage of readily available metal in exchange warehouses.

Three-month copper on the London Metal Exchange rose 1.3% to $10,325 a tonne by 0531 GMT, while the most-traded November copper contract on the Shanghai Futures Exchange was almost unchanged at 75,620 yuan ($11,794.25) a tonne.

LME cash copper was at a record high $1,103.50-a-tonne premium over the three-month contract , compared to $55 just a week earlier, indicating tight nearby inventories.

"There seems to really be no copper around. (Trading) volumes have been monster, but with spreads this tight, some people are too frightened to get involved as there is too much at stake," said commodities broker Anna Stablum of Marex Spectron.

"For once we are actually discounting macro here and just looking at micro."

On-warrant LME copper inventories plunged to 14,150 tonnes on Friday, their lowest since 1998, before rising to 21,050 tonnes, with one entity controlling between 50% and 79% of LME copper warrants , LME data showed.

A weaker dollar also made greenback-priced metals cheaper to holders of other currencies, and a Peruvian community threatening to block a key mining road used by MMG's Las Bambas copper mine also supported prices.

FUNDAMENTALS

* One party held more than 90% of available LME lead stocks and short-term futures .

* LME aluminium rose 0.6% to $3,186.50 a tonne, nickel advanced 0.7% to $20,140 a tonne and zinc increased 0.9% to $3,730 a tonne.

* ShFE lead rose as much as 2.7% to 15,990 yuan a tonne, its highest since Aug. 4, nickel advanced 0.5% to 150,350 yuan a tonne and tin increased 1.3% to 289,650 yuan a tonne.

* For the top stories in metals and other news, click or

($1 = 6.4116 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu and Rashmi Aich)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.