MARKETS-METALS (UPDATE 3):METALS-Copper steadies near 14-month high, stocks rise
* Copper stocks climb to highest since late April
* Softer dollar helps underpin industrial metals
* Chile expects copper prices to stay at "good levels"
(Changes dateline to LONDON from MANILA)
By Rebekah Curtis
LONDON, Dec 3 (Reuters) - Copper steadied on Thursday, lingering just below the previous day's 14-month high as fears about a Dubai debt problem eased, but the latest hefty rise in copper stocks kept sentiment on a leash.
Three-month copper on the London Metal Exchange stood at $7,125 a tonne at 1042 GMT, unchanged from Wednesday's close. It touched a day's high of $7,166, near the previous session's peak of $7,170, the best since late September 2008.
LME stocks of the metal used in power and construction climbed 2,400 tonnes to 445,400 tonnes, their highest level since late April.
"These copper stocks keep going up and up. At some stage people are going to wake up to that," said Charles Kernot, an analyst at Evolution Securities. "Sentiment is on the sidelines at the moment."
The market is starting to shake off jitters about a Dubai debt problem that rattled global equities and commodities in the past week.
"There's been so much activity over the past few days that the market feels it needs to take a breather," Kernot said.
An eighth straight monthly decline in U.S. job losses, and a bullish outlook by the Federal Reserve, helped offset concerns about Dubai.
Prices were also underpinned by the dollar softening against a basket of currencies. A weaker U.S. currency makes dollar-priced commodities cheaper for other currency holders
STELLAR RALLY
Copper MCU3=LX has risen more than 130 percent this year, on track for its biggest annual increase since at least 1978.
But it is still far off a record $8,940 struck in July last year, before the collapse of global markets in the last quarter.
Chile, the world's biggest copper producer, expects copper prices to stay at "good levels" in coming months despite rising inventories, its mining minister said on Wednesday.
Aluminium was at $2,152 from $2,157. It earlier hit $2,166, its highest since late October 2008.
Stocks of the metal used in transport and packaging fell 2,825 tonnes but remain near a record high in the region of 4.6 million tonnes.
Zinc was at $2,427 from $2,420 and battery material lead was at $2,470 from $2,480.
Tin traded at $15,180 from $15,225 and nickel was at $16,200 from $16,300.
"The metal prices are, in our view, susceptible to a sharp price correction, as deteriorating fundamental data is still being masked by financial investors' excessively bullish sentiment," Commerzbank said in a note.
"Once the market focus shifts to the underlying market fundamentals, the high price levels in base metals, which are not justified, won't last long." Metal Prices at 1047 GMT Metal Last Change Percent Move End 2008 Ytd Percent
move COMEX Cu 322.55 -0.60 -0.19 139.50 131.22 LME Alum 2146.00 -11.00 -0.51 1535.00 39.80 LME Cu 7118.00 -7.00 -0.10 3060.00 132.61 LME Lead 2463.00 -17.00 -0.69 999.00 146.55 LME Nickel 16150.00 -150.00 -0.92 11700.00 38.03 LME Tin 15100.00 -100.00 -0.66 10700.00 41.12 LME Zinc 2421.00 1.00 +0.04 1208.00 100.41 SHFE Alu 15760.00 105.00 +0.67 11540.00 36.57 SHFE Cu* 55680.00 370.00 +0.67 23840.00 133.56 SHFE Zin 18625.00 160.00 +0.87 10120.00 84.04 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
