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A worker taps into the copper stream at BHP Billiton's Olympic Dam smelter.

Copper futures hit record highs in London Thursday and 27-month tops in New York, after strong economic data out of China and persistent supply fears stoked by falling stockpiles of the metal.

Three-month copper on the London Metal Exchange hit a record $8,966 (U.S.) a tonne, compared with $8,760 at the close on Wednesday. The previous record peak was $8,940, touched in July, 2008, before prices slumped to below $3,000 in late 2008 as the global economic slump hit commodity prices.

The metal used in power and construction gave up some gains, and was untraded at the close but last bid at $8,830.

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On the New York Mercantile Exchange, the most-active copper contract, December, settled up 5.35 cents, or 1.4 per cent, at $4.0250 per pound - its highest since July, 2008.

Other metals were also firm with battery material lead at its highest since January at $2,650 a tonne. Aluminum hit a two year high at $2,500 a tonne.

Economic data from China - the biggest global consumer of copper - including industrial production figures gave the market extra impetus to rise.

Also aiding sentiment in recent weeks has been the trend of falling London Metal Exchange inventories. Latest data showed copper stocks slipped 1,000 tonnes to 362,950 tonnes.. They are now down by a third from 6-1/2 year highs above 555,000 tonnes in mid-February.

The record high "underlines the tight market situation in copper and it's even more remarkable considering euro/dollar is trading a bit lower," said Arne Lohmann Rasmussen, chief analyst at Danske Bank.

Data showed China's industrial production grew 13.1 per cent in October from a year before. Production of refined copper dipped in October due to the week-long National Day holidays and repairs at a large smelter.

China's retail sales increased by 18.6 per cent, while headline consumer inflation hit a 25-month high of 4.4 per cent in October and new yuan loans also beat market expectations.

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"The China data underwrite a picture of a strong metal demand environment," Barclays Capital said in a note.

Copper has rallied more than 40 per cent off lows hit in June, and is about 20 per cent higher in the year to date.

"The question now is whether this is sustainable. If copper can close the week at such record levels then definitely that is more likely," one European trader said.

Concerns over supply - due to a combination of falling ore grades in major producing nations, labour problems and project delays - have been a major factor behind the surge in copper.

China's top copper producer Jiangxi Coppersaid domestic consumption of the metal is seen growing above 9 per cent in 2011 and warned of a global shortage as early as next year.

Further support came as a strike by union workers at Chile's Collahuasi mine, moved into a seventh day. Output losses are likely at the world's No. 3 copper mine, industry experts said.

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"We'll probably even see even higher prices over the next couple of months," said Daniel Briesemann, analyst at Frankfurt-based Commerzbank about copper. "There is an ongoing strong investment demand, seen in the imminent launch of base metals ETPs," he added, referring to exchange traded products.

Talk that physically backed exchange-traded products in industrial metals were imminent has dominated base metals markets in recent months, generating speculation about their effect on prices and demand. Several firms have put forward plans for base metal ETPs, with copper proving a popular choice.

Metals traders are also watching large holdings of LME stock warrants and cash contracts on primary aluminum, copper, nickel, lead and tin.

Lead ended at $2,610 a tonne against Wednesday's close of $2,604 a tonne. Aluminum ended at $2,458 against $2,448.

Zinc closed at $2,542 a tonne against $2,522. Tin ended at $27,000 a tonne against $26,950 while nickel was at $24,000 a tonne from $24,155.

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