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SINGAPORE, Apr 11: Copper prices galloped to a record high on Tuesday, toying with never-breached territory of $6,000 a tonne, on fund and speculative buying after Grupo Mexico declared force majeure due to strikes at its Mexican mines.

Sharp gains in copper prices on the London Metal Exchange have pushed up other industrial metals, with zinc prices hitting an all-time high of just below $3000 a tonne and copper futures on the Shanghai Futures Exchange setting a record peak.

By 0352 GMT, LME copper for delivery in three months was up $70 at $5,980/$5,990 a tonne. LME copper earlier reached a record $5,990/$6,000.

Grupo Mexico declared force majeure on Monday on copper and molybdenum contracts as strikes at some of its Mexican mines dragged into a third week and workers vowed to continue their action.

''It's hard to see sellers in the market,'' an LME dealer in Tokyo said. ''The Grupo Mexico news was the main driver for the market.'' On Monday, copper prices gained $185, or more than 3 percent, to close at $5,910. The red metal, used in construction and electronics, has gained more than 35 percent this year.

Copper prices have risen over four-fold from below $1,400 in November 2001 on strong demand and tight supply after years of under-investment in new mining projects, and as more funds flocked into the red-hot commodities sector for higher returns.

LME stocks fell 900 tonnes to 111,800 tonnes on Monday, and have fallen more than 15 percent since mid-March. Three years ago, LME copper stocks were about 800,000 tonnes.

''There seems no stopping copper with the rally being fuelled on a high-octane mixture of supply concerns, fund buying and roaring momentum,'' William Adams, a metals analyst at BaseMetals.com, said in a daily note.

''With so many factors driving the markets, you have to ask whether things have indeed changed that much or is the situation running ahead of itself.

''Although there is little doubt that fundamentals are tight, there seems an awful lot of hype in the market and with prices knocking on $6,000, the whole complex looks over-cooked and in need of a reality check.'' The most active Shanghai copper contract, June, ended the morning session at 56,070 yuan ($6,982) a tonne, up 1,170 yuan from the previous close, after hitting a new high of 56,270 yuan.

''In March, consumers were reluctant to buy copper, but now they are forced to buy it,'' said Shen Haihua, vice president of Maike Futures in Shanghai.

As the market was expecting a seasonal pick-up in demand for the second quarter, he said: ''So trading activity in the physical market is good.'' LME aluminium was at $2,593/$2,598 a tonne after gaining $34 on Monday to close at $2,574, while Shanghai's most active aluminium contract, June closed the morning session down 40 yuan at 20,550 yuan from the previous close.

In other LME metals, zinc rose to a record $2,940/$2,950 a tonne, from London's close of $2,911.

On Monday, LME zinc stocks fell another 2,725 tonnes to 267,650, the lowest since June 2001. At the end of last year, LME zinc stocks were just below 400,000 tonnes.

Zinc, used as an anti-corrosive coating in galvanised steel production, has been a star performer in the base metals complex this year, gaining nearly 54 percent on tight concentrates supply and growing demand from the steel sector.

In the mining sector, the world's top miner, BHP Billiton Ltd./Plc. gained 2.1 percent to A$29.93, while Rio Tinto Ltd./Plc., the second-biggest miner, firmed 2.7 percent to A$84.47.

In other commodities, oil prices inched towards $69 per barrel, while spot gold raced above the $600-an-ounce mark for the first time since December 1980 and silver rose to another 23-year peak.

Metal Prices by 0352 GMT LME ($/tonne), SFE (yuan/tonne) and COMEX (US cents/lb) Metal Last Net Change Pct Move LME Cu 5980.00 70.00 +1.18 SHFE Cu* 56070.00 1170.00 +2.13 LME Alum 2593.00 19.00 +0.74 SHFE Alu* 20550.00 -40.00 -0.19 COMEX Cu** 273.90 0.00 +0.00 LME Zinc 2940.00 29.00 +1.00 LME Nickel 17400.00 -25.00 -0.14 Change so far in 2006 Metal Latest bid End prev year Pct Move LME Cu 5980.00 4395.00 +36.06 SHFE Cu* 56070.00 41720.00 +34.40 LME Alum 2593.00 2276.00 +13.93 SHFE Alu* 20550.00 19360.00 +6.15 COMEX Cu** 273.90 204.20 +34.13 LME Zinc 2940.00 1905.00 +54.33 LME Nickel 17400.00 13500.00 +28.89 LME Lead 1180.00 1051.00 +12.27 LME Tin 8575.00 6475.00 +32.43 * 3rd contract months for SHFE copper and aluminium.

** 1st contract month for COMEX copper.

($1=8.03 yuan)

REUTERS