By Chanyaporn Chanjaroen and Millie Munshi

July 1 (Bloomberg) -- Copper rose the most in four weeks, extending its first-half rally, as manufacturing expanded in China, the world’s largest user of the metal.

China’s Purchasing Managers’ Index climbed to a seasonally adjusted 53.2 in June from 53.1 in May. Record imports into the Asian nation helped copper to surge 61 percent in the first six months of 2009, the biggest first-half gain since 2006.

“The number shows China’s economy is still picking up,” said David Wilson, an analyst at Societe Generale SA in London. “Copper was stronger than expected in the first half. We expect a lot of volatility in the third quarter and sideways trade.”

Copper futures for September delivery gained 8.55 cents, or 3.8 percent, to $2.3575 a pound at 10:37 a.m. on the New York Mercantile Exchange’s Comex division. That would be the biggest gain for a most-active contract since June 9, should the metal close at that level.

Manufacturing in the U.S. shrank in June at the slowest pace in 10 months, another sign the worst of the recession may be over, a private report showed today.

The metal also gained as U.S. equity markets rose, improving investor sentiment. The Standard & Poor’s 500 Index advanced as much as 1.4 percent. The gauge jumped 15 percent in the second quarter as copper added 23 percent.

‘Close Correlation’

“Copper has had a tremendously close correlation with the stock market in the past few months,” said Donald Selkin, the chief market strategist at National Securities Corp. in New York. “People are looking at the stock market as a symbol of worldwide economic recovery.”

Commodity assets under management expanded by $34 billion in the second quarter, the second-largest increase on record, Barclays Capital said yesterday. Total assets were about $210 billion.

“Investment flows are also likely to stabilize, rather than grow at the pace they have been growing” this year, said Amrita Sen, a Barclays Capital analyst in London.

On the London Metal Exchange, copper for three-month delivery added $172.25, or 3.5 percent, to $5,139.25 a metric ton ($2.34 a pound).

Among other LME metals for three-month delivery, lead increased 3.6 percent to $1,750 a ton. Nickel rose 7.3 percent to $16,499 a ton. Zinc climbed 3.3 percent to $1,600 a ton, and tin added 4.6 percent to $14,800 a ton. Aluminum gained 3.1 percent to $1,680 a ton.

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net; Millie Munshi in New York at mmunshi@bloomberg.net.