METALS-Copper hits 3-week high on firm Chinese demand; nickel stretches rally

* Physical copper premiums in China rising sharply

* Shanghai copper at 6-week high, aluminium at 2-month peak

* Nickel hits fresh 14-month top, up for 16th session in 17

* Coming up: U.S. durable goods orders at 1230 GMT

(Adds Minmetals, aluminium, updates prices, copper milestones)

SINGAPORE, April 24 (Reuters) - London copper futures rose to three-week highs on Thursday, underpinned by strong seasonal demand in top consumer China that has lifted domestic premiums, while worries over tight supply pushed nickel to a fresh peak in more than 14 months.

April and May are seasonally strong months for copper consumption in China amid brisk construction activity. Seasonality has now pushed up the gap between spot copper prices and front-month futures in Shanghai to the highest since 2010.

Three-month copper on the London Metal Exchange was up 0.6 percent at $6,709 a tonne by 0702 GMT, after hitting a session high of $6,723.50, its loftiest since April 2.

The most-traded July copper contract on the Shanghai Futures Exchange peaked at 47,330 yuan ($7,600) a tonne, its highest since March 10, before settling at 47,250 yuan, up 1.3 percent.

"Demand is picking up right now because April is a strong month for copper demand in China. A lot of Chinese refineries are also selling their copper to the bonded warehouses which limited the supply in the domestic market," said Guo Hao, analyst at Jinrui Futures in Shenzhen.

Copper is being sold in Shanghai at up to 48,280 yuan a tonne on Thursday, over 500 yuan more than the price for front-month copper on the Shanghai Futures Exchange.

In China's Changjiang metals trading market, the premium went as high as 970 yuan a tonne this year, a level not seen since 2010, said Guo.

But expectations of increased global supply of copper this year have capped gains in prices of the industrial metal which has lost 9 percent of its value this year.

China could become a net exporter of refined copper in one to two years, said Xiaoguang Jin, vice president at Minmetals Non-Ferrous Metals Holding Limited.

China's refined copper capacity is now sufficient to cover domestic demand, and the country should also be able to sell its copper output to global markets in future, Jin said.


China's state stockpiler has bought at least 200,000 tonnes of imported copper stored in bonded warehouses after global copper prices dived to multi-year lows in March, sources said.

Further purchases by China's State Reserves Bureau (SRB) could help absorb the small surplus forecast to weigh on the global refined copper market this year and help support prices that have already dropped nearly 10 percent so far this year.

"Without SRB's purchase, weak copper demand and oversupply concerns do not justify copper trading above $6,500, in our view," UOB-Kay Hian Securities senior metals analyst Helen Lau said in a note.

Nickel continued to outpace copper, gaining for a 16th session out of 17 on Thursday. LME three-month nickel touched a session high of $18,600 a tonne, its strongest since Feb. 6, 2013, before trimming gains to $18,560, up 1 percent.

Nickel has gained more than 33 percent this year, far more than other base metals, as an Indonesian ban on exports of unprocessed minerals from January tightened supplies of nickel ore which top buyer China uses in the production of stainless steel.

"I think it will be hard for nickel to break $20,000. It would be very difficult for stainless steel mills to persuade customers to accept higher prices," said a trader in Beijing.

Elsewhere, Shanghai aluminium closed almost 2 percent higher at 13,695 yuan a tonne. It hit a session peak of 13,725 yuan, the highest since Feb. 18, regaining more ground after hitting a record low last month.

LME aluminium rose 0.7 percent to $1,886.75 a tonne, rising for a second session in three.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin ($1 = 6.2376 Chinese yuan)

(Editing by Muralikumar Anantharaman and Anupama Dwivedi)