July 30, 2010 –   * COMEX copper sets highest close since April 30

* Aluminium hits 11-week high on consumer buying

* Strong US Midwest business gauge spurs month-end buying

* Coming Up: On Monday, US ISM manufacturing gauge

(Recasts, updates prices, market activity to New York close; new byline, changes dateline, previously LONDON)

By Carole Vaporean

NEW YORK (Reuters) - Copper ended higher Friday, reversing early losses and shooting to a three-month peak on a healthy round of month-end buying after data showed manufacturing in the U.S. Midwest accelerated, suggesting a strong demand outlook for industrial metals.

Aluminium rose to an 11-week high as industrial consumers bought the metal.

Benchmark copper for three-months delivery on the London Metal Exchange ended at $7,298 a tonne, versus $7,231 previously, and hit its highest since May 4 at $7,310.

The metal, used in construction and wiring, rose 12 percent in July over June, notching its biggest monthly gain in 11 months, thanks to improved risk appetite and demand prospects.

In New York, copper for September delivery rose 2.15 cents to end at $3.3115 per lb on the COMEX. The contract ran up to $3.3130 per lb, a fresh high dating back to May 4.

Copper turned positive after the Institute for Supply Management-Chicago business barometer rose more than forecast to 62.3 in July, suggesting demand for industrial metals could remain firm despite signs of economic weakness. Employment and orders components boosted the overall index for the U.S. Midwest.

The Midwest business gauge spurred some investors to add to metals holdings in their portfolio heading into month-end.

Aluminium closed at its daily high of $2,170 a tonne, a level not seen since May 13, versus $2,093.

"Aluminium below $2,000 is a bargain," said Eugen Weinberg, an analyst at Commerzbank. "The marginal production costs are above $2,200, and if you don't expect a massive slowdown of the Chinese economy, current prices are still a good opportunity."

In addition to strength shown in the Midwest business barometer, Peter Buchanan, commodities analyst and senior economist at CIBC in Toronto suggested that some investors may have been buying to set up for China's industrial sector readings due out over the weekend.

"We did have the ISM-Chicago activity index come in on the strong side and we also have China's twin PMI numbers--the official one on Saturday and the HSBC one on Sunday. Certainly, China is front and center as far as the demand outlook goes. People may be cautiously optimistic ahead of that," he said.

China's official PMI is likely to have eased to a 17-month low in July as policies to curb lending and rein in the property market weigh on manufacturing.

On Monday, investors will be watching for the ISM, a much-watched U.S. manufacturing sector gauge. Analysts expect U.S. manufacturing grew in July for a twelfth straight month.

Construction spending is also due on Monday and will give further insights into the faltering U.S. housing sector.

ALUMINUM LOOKS STRONG

Analysts said decent aluminum buying in Europe was also spurred by consumers taking advantage of a stronger euro , which has been rising since early June and climbed above $1.31 briefly on Thursday.

Recent aluminium production and stocks data also looked bullish for aluminium, analysts said.

Western world unwrought aluminium stocks fell to 1.192 million tonnes in June from a revised 1.306 million tonnes in May, industry data showed on Monday.

Metal traders told Reuters that Deutsche Bank was preparing to follow the world's top aluminium producer, Russia's UC RUSAL , in considering an aluminium ETP.

Such a move could tighten the aluminium market, where inventories are still close to record highs of 4.6 million tonnes set in January. Around 75-80 percent of them are estimated to be tied up in financing deals.

"ETFs are indeed able to change the aluminium market completely," said Weinberg.

U.S. DATA RELEASES

Earlier, the U.S. GDP report showed second-quarter growth in the world's largest economy slowed.

"We're seeing a bit of fragmentation, but it's encouraging to see the forward-looking indicators beating expectations," said Daniel Major, analyst at RBS Global Banking & Markets.

LME copper stocks rose by 1,975 tonnes on Friday, but the ratio of cancelled warrants, or materials tagged for delivery, stood at 7.9 percent, indicating active demand.

Shanghai Futures Exchange copper inventories fell 8 percent from a week earlier, the exchange said.

Battery material lead was untraded at the close, but last bid at $2,075 a tonne, versus $2,050 a tonne. The metal earlier touched its highest since May 11 at $2,081.

Tin ended at $19,500 a tonne from $19,600, while nickel closed at $21,150 from $20,675 a tonne. Nickel earlier hit $21,204, a level not seen since May 28.

Zinc closed at its highest level in two and a half months at $2,025 from Thursday's $1,990 a tonne.

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For LME copper technical outlook: [ID:nSGE66Q01G]

For ShFE copper technical outlook: [ID:nSGE66T02G]

For LME aluminium technical outlook: [ID:nSGE66T023]

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(Additonal reporting by Michael Taylor and Humeyra Pamuk; Editing by David Gregorio)