* Copper rises to highest since Sept. 8 at $6,903/T
* LME/ShFE arb: bit.ly/2wZSAEz
* GRAPHIC-2017 metal returns: tmsnrt.rs/2eqHKkL (Updates with closing prices, adds comment)
By Jan Harvey
LONDON, Oct 12 (Reuters) - Copper prices hit their highest in more than a month on Thursday as optimism over the demand outlook from major consumer China fuelled buying.
Solid demand in China has opened the “arbitrage window” for copper imports, traders said. Premiums for copper held in China’s bonded zones have climbed by $9 this week to $74, the highest in more than two months. CU-BMPBW-SHMET
“Demand is coming from China,” Societe Generale analyst Robin Bhar said. “We’re seeing some arb-related buying - buying LME, selling Shanghai Futures Exchange.”
“The Chinese have come back from their holidays and they are seeing better demand optimism through to the end of the year,” he said. “That’s helping.”
Many metals market participants are awaiting the outcome of China’s Communist Party Congress next week, Capital Economics analyst Caroline Bain said, for an indication of broader policy initiatives and their implications for metals demand.
* LME COPPER: London Metal Exchange copper closed up 1.3 percent at $6,887 a tonne, having earlier hit its highest since Sept. 8 at $6,903. Prices were edging towards a three-year peak of $6,970 hit on Sept. 5.
* COPPER STOCKS: Stocks of copper in LME warehouses MCU-STOCKS fell by another 1,025 tonnes, exchange data showed on Thursday. They are now down 9 percent from mid-September’s two-month peak.
* NICKEL: LME nickel ended at $11,395 a tonne, up 2.3 percent, having touched a three-week peak of $11,425.
* ZINC AND LEAD: LME zinc finished the day up 1 percent at $3,251 a tonne, while lead closed 0.4 percent lower at $2,556 a tonne. The latter was held in check by prospects of rising supply after a Chinese smelter said it had restarted production.
* ZINC BACKWARDATION: The premium of cash zinc over the three-month contract MZN0-3 stood at a 10-year high of $80 a tonne, indicating shortages in immediately available supply.
* MMG: MMG Ltd, the international mining unit of state-owned China Minmetals Corp, has become China’s preferred developer of overseas projects and is looking at acquisitions beyond its core strengths of copper and zinc, MMG’s chief executive said.
* U.S. INTEREST RATES: Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and slowing the path of future interest rate rises if it did not, according to the minutes of the U.S. central bank’s last policy meeting.
* OTHER METALS: LME aluminium ended the day 0.8 percent higher at $2,146.50 a tonne, while tin closed down 0.6 percent at $20,740 a tonne.
Additional reporting by Melanie Burton in Melbourne; Editing by Dale Hudson and Mark Potter