Base metals closed mostly higher on the London Metal Exchange Thursday, following a day of healthy rallies across almost the entire complex.

Copper recovered most of the ground lost in its most recent dip, trading at $9,440 a metric ton, up 1.2% on the day, at the PM kerb close.

A weaker U.S. dollar on the back of talk of further bond buying by the U.S. Federal Reserve provided a tailwind for the dollar-denominated complex.

"Although the weaker dollar has had a spotty record of boosting metals prices of late, we suspect it should start having more of an impact in the week ahead, particularly as we close in on the $1.40 level against the euro," said Edward Meir of MF Global.

At 1743 GMT, EUR/USD was up 0.1% at $1.3703.

Comments by the Federal Reserve suggesting the U.S. economic recovery is on track also boosted hopes for stronger demand for base metals, which are used widely in construction.

Tin continued its recent rally, hitting fresh highs as it pushed hard against the $30,000/ton mark.

While tin closed at $29,075/ton, up 1.6% on the day, it peaked at $29,300/ton earlier in the day.

However, some market participants remain skeptical of tin's near-term potential.

Barclays Capital warned that rising LME inventories, recent Chinese destocking that has "yet to be reversed" and reports of normalized output from Indonesia's primary tin producing area after a period of adverse weather may stymie tin's progress.

"There are several persuasive reasons for believing that current fundamental conditions offer enough headwinds to justify some price consolidation before a sustained attempt on the $30,000/ton level," the bank said in a daily report.

Stockpiles of tin in LME warehouse currently stand at 17,720 tons, up 2.6% on the week.

Aluminum, which has slid more or less steadily since just after the New Year, also made solid gains Thursday, closing at $2,427/ton, up 1.7% on the day.

The potential downside risk for aluminum this year is "limited," as demand for the metal looks set to stay strong, said BNP Paribas analyst Stephen Briggs in a report.

"Aluminum should continue to outperform strongly, not least because it will be a prime beneficiary of substitution away from other metals, especially copper," said Briggs, forecasting demand growth of 18% between 2010 and 2012.

 
   Prices in dollar a metric ton. 
3 Months Metal             Bid-Ask        Change from 
                                          Wednesday PM kerb 
Copper                 9440.0-9442.0      Up 115 
Lead                   2419.0-2420.0      Up 44 
Zinc                   2260.0-2265.0      Dn 18 
Aluminum               2427.0-2428.0      Up 40 
Nickel               26495.0-26500.0      Up 20 
Tin                  29075.0-29125.0      Up 475 
Aluminum Alloy         2235.0-2245.0      Up 25 
Aluminum Alloy-NASAAC  2430.0-2435.0      Up 90

-By Francesca Freeman, Dow Jones Newswires; +44 (0)20 7842 9412; francesca.freeman@dowjones.com