METALS-Copper hits five-week peak on China stimulus hopes

(Updates prices at 1700 GMT) By Eric Onstad LONDON, Jan 16 (Reuters) - Copper prices touched a five-week high on Thursday after the dollar's rally paused and investors had renewed hope that China would take more action to boost its sluggish economy. Three-month copper CMCU3 on the London Metal Exchange (LME) rose 0.7% to $9,230 a metric ton by 1700 GMT, after touching the strongest since Dec. 11 at $9,271. Copper got additional impetus after Fed governor Chris Waller said inflation is likely to continue to ease and possibly allow the Federal Reserve to cut rates sooner and faster than expected. Earlier, investors welcomed reports by China's state saying that the country's central bank may cut banks' reserve requirement ratio (RRR) before the Spring Festival at the end of this month, helping to boost the Chinese stock market. "People are getting a little bit more optimistic about China, but the key thing is, does the Chinese government have the appetite to do anything bigger or bolder," said Nitesh Shah, commodity strategist at WisdomTree. "Even if they were to cut the reserve requirement ratio or make a small tinkering with rates once again, I don't think that's going to be enough. I do think they need a full package of stimulus." The most active copper contract on the Shanghai Futures Exchange SCFcv1 was up 1.1% at 76,080 yuan ($10,353.95) a ton. The market was also supported by the dollar .DXY , which took a breather from recent strength. FRX/ A weaker dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies. LME aluminium CMAL3 gained 1.3% to $2,634.50 a ton, having hit $2,647, the highest since Dec. 5, helped by plans by the European Commission to ban Russian primary aluminium, according to EU diplomats. "Russian shipments of the metal to Europe have already fallen due to widespread self-sanctioning by manufacturers. Any further restrictions would likely see only a limited impact on the market," ANZ Research said in a note. In other metals, LME zinc CMZN3 added 0.3% to 2,871.50 a ton, nickel CMNI3 gained 0.7% to $15,965, lead CMPB3 jumped 1.8% to $1,969.50, while tin CMSN3 shed 0.6% to $29,420. For the top stories in metals, click TOP/MTL ($1 = 7.3315 Chinese yuan) (Reporting by Eric Onstad; editing by David Evans, Vijay Kishore and Mohammed Safi Shamsi) (([email protected]; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: [email protected])) (( For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))