LONDON, Feb 1 (Reuters) - Copper prices rose on Tuesday after data showed strong factory activity in Europe and Japan and as the dollar weakened, making metals cheaper for buyers outside the United States.
Nickel also gained as falling inventories in exchange warehouses pushed premiums for quickly deliverable metal to their highest since 2009.
Benchmark copper on the London Metal Exchange (LME) was up 1.6% at $9,655.50 a tonne at 1147 GMT, a little below last May's record high of $10,747.50.
LME nickel was up 1.6% at $22,695 a tonne after reaching $24,435, the highest since 2011, on Jan. 20.
Signs of softer copper demand from top consumer China, where import premiums have fallen, suggest copper prices could slip, said BMO analyst Colin Hamilton.
Shanghai Futures Exchange (ShFE) inventories typically increase rapidly around Chinese New Year, and with ShFE stocks near their lowest since 2009, the market will pay close attention to their pace of growth, he said.
CHINA HOLIDAY: Trading activity is muted with Chinese markets closed this week for New Year celebrations.
FACTORIES: Factory activity expanded in January in the Euro zone, Britain, Japan and Russia, PMI surveys showed. However, data on Sunday showed Chinese factory activity slowed.
INDIA STIMULUS: India said it will step up spending to 39.45 trillion rupees ($530 billion) in the coming fiscal year to build public infrastructure and drive economic growth.
DOLLAR: The dollar weakened from last week's 19-month high against a basket of major peers after four U.S. Federal Reserve policymakers expressed caution about how many interest rate hikes will follow an expected first one in March.
NICKEL: Inventories in LME-registered warehouses have fallen to 89,364 tonnes from around 250,000 tonnes a year ago and stocks in ShFE warehouses, at 2,975 tonnes, are the lowest on record. .
Lack of available supply pushed the premium for cash nickel over the three-month contract above $500 a tonne for the first time since 2009.
OTHER METALS: LME aluminium was up 0.9% at $3,048 a tonne, zinc rose 0.4% to $3,601.50, lead was flat at $2,243.50 and tin was down 0.7% at $42,720.
Reporting by Peter Hobson; Additional reporting by Enrico Dela Cruz in Manila; Editing by Amy Caren Daniel