Jan. 4 (Bloomberg) -- Copper and zinc rose by the exchange- imposed daily limit in Shanghai as demand outstripped supply after overnight gains in prices on the London Metal Exchange and in other commodities such as gold and oil.

``It's all to do with the strength we're seeing across the complex, which is fueling the enthusiasm for buying anything related to commodities,'' Li Rong, chief metal analyst at Great Wall Futures Co., said by e-mail today from Shanghai.

Commodities rose to a record for the second straight day yesterday as crude oil and gold climbed to their highest ever and the dollar fell, increasing the allure of raw materials as a hedge against inflation. The UBS Bloomberg Constant Maturity Commodity Index rose as much as 1.7 percent to a record 1,327.21.

``There are definitely worries about inflation leading to slower growth and weaker demand,'' said Li. ``However, these concerns tend to manifest in the prices only later.''

Copper for March delivery on the Shanghai Futures Exchange rose 2,300 yuan, or 4 percent, from the previous settlement to 59,800 yuan ($8,223) a metric ton in early trade. Metal for three-month delivery on the London Metal Exchange traded up 2.2 percent at $7,125 a ton at 12:35 p.m. Shanghai time.

Base metals are benefiting from ``pent-up buying interest and start of the year investment inflows,'' according to David Moore, commodity strategist at Commonwealth Bank of Australia.

Inflation Concern

``Other factors that may have lent support to base metals possibly include the anticipation of lower U.S. interest rates, inflation concerns and the broad strength over the range of commodities,'' Moore wrote in a research note today. ``Concerns over the international economic outlook appear to have taken a back seat, at least for now.''

Oil reached a record $100.09 a barrel yesterday and gold for immediate delivery traded as high as $868.89 an ounce. The dollar traded near the lowest in a month against the euro and yen on speculation U.S. borrowing costs will drop.

``China should be a huge risk factor because they're probably going to try to slow down the economy using monetary policies,'' Tetsuya Yoshii, vice president for derivative products at Mizuho Corporate Bank Ltd., said in a Bloomberg Television interview. ``That kind of monetary policy is going to affect base metal consumption in China'' in the second half.

Other Metals

Zinc in Shanghai for March delivery also gained by the 4 percent daily limit, by 775 yuan to 20,160 yuan a ton. LME zinc for delivery in three months was unchanged at $2,575 a ton at 12:30 p.m. Shanghai time, after increasing 5.1 percent yesterday.

Aluminum for March delivery in Shanghai rose as much as 2.7 percent from the previous settlement to 18,610 yuan a ton, and stood at 18,460 yuan at 11:30 a.m. local time. LME aluminum was flat at $2,508 a ton, after gaining 2.8 percent yesterday.

Among LME-traded metals, lead extended yesterday's 2.1 percent gain to trade up 0.8 percent at $2,690 a ton. Nickel advanced 1.6 percent to $29,400 a ton, after soaring 6.4 percent yesterday. Tin traded at $16,775 a ton after settling yesterday 2.6 percent higher at $16,800.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

Last Updated: January 3, 2008 23:44 EST