METALS-Copper buoyed by demand prospects, lead near 16-mth top

*G20 comments reassure investors, lift equities

*Lead supply woes linger

LONDON, Sept 7 - Copper rose on Monday as stronger demand prospects boosted confidence, but last week's mixed U.S. payrolls data was seen as signalling a slow recovery and kept a cap on gains.

Lead touched $2,384.25 a tonne, within a whiskerof 16-month highs seen on Friday, underpinned by worries over smelter shutdowns in China linked to pollution concerns, although there are indications the outages will be short-lived.

Copper for three-months delivery on the London Metal Exchange traded at $6,310 a tonne in official rings from a close of $6,280 on Friday. The metal, which has more than doubled in price this year, saw reduced trade volumes on account of Monday's U.S. Labor Day holiday.

"Equities, the dollar, specific economic indicators - the bulk of those features short term are almost universally positive," said Neil Buxton, managing director at GFMS Metals Consulting.

He added, however: "In the medium term there'll be reflection on whether all the optimisitic scenarios have been priced into a market that's more than doubled so far this year."

U.S. data on Friday showed job losses fell to their lowest level in a year last month, but the unemployment rate jumped to a 26-year high. Nevertheless, markets remain bouyant. Global shares rose on Monday after weekend comments from G20 finance ministers and central bankers that they will keep stimulus measures in place until recovery is entrenched. Also aiding copper was a weak U.S. dollar, which makes dollar-priced metals cheaper for non-U.S. investors.

On the radar are pay talks which could disrupt supplies. Mine workers at BHP Billiton's Spence copper mine in Chile were due to start formal pay negotiations on Monday.

"Over the next three to four months, labour contracts that affect...up to 17 percent of forecast 2009 mine supply, will need to be renegotiated," Macquarie said in a note.

"Spence is the first major copper mine to enter negotiations and may provide a signal for other forthcoming negotiations."

LEAD SUPPLY WOES

Battery material lead was untraded in the rings, but bid at $2,364 a tonne from $2,304 on Friday.

Lead, which has risen over 20 percent in two weeks, remains underpinned by the Chinese authorities' move to shut down polluting smelters.

"The lead supply bottleneck has been in concentrate availability and not smelting capacity, but there will be a lag between when this capacity is taken offline and when new smelting capacity is ramped up," Barclays Capital said in a note.

"Some of the new capacity had been planned to replace older, less efficient production, but if the Chinese government plans a strict clampdown then the scale of closures looks likely to more than offset planned capacity increases."

Zinc was bid at $1,930 from $1,922, having surged to a 13-1/2 month high of $1,989.75 on Friday on fears China might shut down zinc smelters next.

Elsewhere, aluminium traded at $1,855 a tonne from Friday's last bid at $1,850. Latest LME data showed stocks of the metal fell 4,825 tonnes but remained near a record 4.6 million tonnes.

Tin, used in electrical solder, traded at $14,300 from a bid at $14,250, while stainless steel ingredient nickel was bid at $17,700 from $17,650.

Latest LME data showed nickel stocks rose 504 tonnes to 117,144 - the highest level since April 1995. Metal Prices at 1218 GMT Metal Last Change Percent Move End 2008 Ytd Percent

move COMEX Cu 286.15 1.80 +0.63 139.50 105.13 LME Alum 1846.00 -6.00 -0.32 1535.00 20.26 LME Cu 6295.00 15.00 +0.24 3060.00 105.72 LME Lead 2346.00 42.00 +1.82 999.00 134.83 LME Nickel 17655.00 5.00 +0.03 11700.00 50.90 LME Tin 14100.00 -350.00 -2.42 10700.00 31.78 LME Zinc 1922.00 0.00 +0.00 1208.00 59.11 SHFE Alu 14960.00 -65.00 -0.43 11540.00 29.64 SHFE Cu* 49540.00 10.00 +0.02 23840.00 107.80 SHFE Zin 15550.00 -135.00 -0.86 10120.00 53.66 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07