* Supply side will be important in 6-12 months' time
* Aluminum stocks hit record high above 4.637 mln T
* Tin hits six-month high
(Changes headline, recasts with New York closing price and
analyst comments; adds NEW YORK byline/dateline)
By Chris Kelly and Pratima Desai
NEW YORK/LONDON, Dec 17 Copper prices lost more
than 2 percent of their value by the close on Thursday as a
rallying dollar pressured values, but analysts said a healthier
global demand outlook was expected to fortify sentiment and
Copper for March delivery HGH0 on the New York Mercantile
Exchange's COMEX division dropped 7.75 cents, or 2.4 percent, to
settle at $3.1280 a lb, after dealing between $3.1180 and
On the London Metal Exchange (LME), benchmark copper MCU3
closed at $6,870 a tonne, down $169 from the close on Wednesday.
The dollar surged to a three-month high against a currency
basket after the Federal Reserve voiced growing optimism about the
health of the U.S. economy, while the euro tumbled on worry about
Greece's fiscal health. [USD/]
"The market is very sensitive to some of the events going on
in Europe, with respect to the credit and quality problems in
Greece," said Steve Platt, futures analyst with Archer Financial
Services in Chicago.
"It certainly could feed back into the copper and be a real
limiting influence in terms of upside movement," he said.
However, the damage from the dollar has partly been offset by
improving economic data from the United States, the world's
largest economy, highlighted in a statement from the Fed on
Wednesday, and expectations of higher demand. [ID:nN16119711]
"For metals, the uptrend is still very much in place," said
analyst Gayle Berry at Barclays Capital, adding the upbeat
economic data over the past couple of weeks has raised the
prospects for metals.
A higher U.S. currency makes dollar-denominated metals more
expensive for holders of other currencies. Even though some
analysts think the dollar will rise further, fundamentals are
expected to play a bigger role in coming months.
Copper prices are up about 125 percent this year, despite a
bearish backdrop of a growing supply base. Inventories of the
metal used in power and construction in LME warehouses stand at
474,575 tonnes -- a gain of about 85 percent since the middle of
July and the highest since April.
Aluminum stocks hit a record high above 4.637 million tonnes,
nearly double the levels seen at the start of 2009.
But prices of the metal used widely in transport and packaging
are up about 45 percent this year because about 70 percent of LME
stocks are tied up in financing deals until May and so are not
available to the market. [ID:nGEE5B20OB]
Also a plus are canceled warrants -- material already
earmarked for delivery -- at around 200,000 tonnes.
"Though it's not available there's a massive stock overhang, a
capacity overhang and the outlook is for a large aluminum market
surplus over the next few years," said Max Layton, analyst at
Tin prices bucked Thursday's softer trend in metals and and
rose to their highest in six months at $15,820 and closed $275
higher at $15,775 a tonne.
"We've seen a rapid increase in tin stocks, but recently that
rise has come to halt and they've actually begun to fall," Berry
said. "Also the price spread between China and London is holding
at a sizable premium, telling that Chinese demand is doing pretty
well," she said.
Tin stocks are currently at 26,400 tonnes, down only about
500-600 tonnes from the seven-year high hit in November. But LME
data shows between 80 percent and 90 percent of the stocks are
held by a single dominant position. <LME/WHD>
Nickel MNI3 closed at $17,100 a tonne from $17,500 at the
close on Wednesday, aluminum MAL3 at $2,220 from $2,276 and zinc
MZN3 at $2,391 from $2,434. Battery material lead MPB3 traded
at $2,359 a tonne from $2,410.
For a story on a possible bid by Deutsche Bank for RBS Sempra
to expand its commodities involvement, click on [ID:nLDE5BG0T9]
Metal Prices at 1956 GMT
Metal Last Change Pct Move End 2008 Ytd Pct
COMEX Cu 310.80 -7.80 -2.45 139.50 122.80
LME Alum 2222.00 -54.00 -2.37 1535.00 44.76
LME Cu 6861.00 -178.00 -2.53 3060.00 124.22
LME Lead 2350.00 -60.00 -2.49 999.00 135.24
LME Nickel 17150.00 -350.00 -2.00 11700.00 46.58
LME Tin 15575.00 75.00 +0.48 10700.00 45.56
LME Zinc 2409.00 -25.00 -1.03 1208.00 99.42
SHFE Alu 16400.00 -45.00 -0.27 11540.00 42.11
SHFE Cu* 55670.00 350.00 +0.63 23840.00 133.52
SHFE Zin 18875.00 175.00 +0.94 10120.00 86.51
** 1st contract month for COMEX copper * 3rd contract month for
SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Additional reporting by Humeyra Pamuk; Editing by Anthony Barker
and Christian Wiessner)