BASE METALS: LME Metals Up Helped By Equity Rise

 LONDON -(Dow Jones)- Base metals on the London Metal Exchange traded up Monday as a rise in equity markets and the euro put a stop to the risk reduction-induced drop last week.

The industrial metals should now consolidate this week ahead of the Chinese New Year holiday that begins next weekend, but any large moves in the broader markets will influence metals, traders and analysts said.

Adding to the more upbeat mood in metals Monday were good full-year results for miner Xstrata PLC (XTA.LN) and talk of an arbitrage that favors imports of copper into China as prices on the LME are lower than Shanghai Futures Exchange prices.

Traders warned that the arbitrage may not result in large imports as much of the interest is for contracts a few months away.

Metals dropped last week along with equities and the euro as investors favored the cash in the form of the U.S. dollar due to Greek debt concerns and similar problems in Spain and Portugal.

Those fears have steadied for the time being helped by a mild rise in U.S. equities Friday which continued Monday.

"The commodities had previously looked to have broken free from the other markets, particularly around the turn of the year," said Standard Bank analyst Leon Westgate. "However, with the markets generally shifting back into risk aversion mode, the commodities have once again started tracking the dollar and the equity markets."

Over the short term, commodities will continue to track the wider global markets, either until confidence over the global economic recovery improves, or until physical demand starts to return, Westgate said.

The drop in copper prices last week was accompanied by a drop in speculative long positions, or bets that prices will rise, said Robin Bhar, an analyst at Credit Agricole Corporate & Investment Bank.

In other news, Brazilian miner Vale SA (VALE: 25.19, -0.51, -1.98%) said it's aiming to ramp up more nickel production at its Canadian operations, where a strike is in its seventh month.

The company said it seeks to "ensure a continuous supply of feed to our smelter and facilitate an eventual return to full operations."

Prices in dollar a metric ton. 3 Months Metal Bid-Ask Change from Friday PM kerb Copper 6446.0-6450.0 Up 167 Lead 1964.5-1965.0 Up 29.5 Zinc 2022.0-2022.5 Up 82 Aluminum 2012.0-2013.0 Up 33 Nickel 17275.0-17300.0 Up 250 Tin 15195.0-15200.0 Dn 255 Aluminum Alloy 1870.0-1880.0 Up 5 Aluminum Alloy 1939.5-1940.0 Up 19.5 (NASAAC: undefined, undefined, undefined%)

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