MARKETS-METALS (UPDATE 4) * Copper stocks rise to highest since mid-April * Aluminium stocks within reach of record highs * Dollar hits 6-week high against major currency basket (Updates prices) By Rebekah Curtis LONDON, Dec 15 (Reuters) - Copper fell on Tuesday, as dollar strength made commodities priced in the greenback costlier for other currency holders, while rising LME stocks underscored weak fundamentals. Copper for three-months delivery on the London Metal Exchange traded at $6,845 a tonne in official rings from a close of $6,913 on Monday. "The situation is tricky, we have weak fundamentals and a strong dollar," said Eugen Weinberg, commodities analyst at Commerzbank. The dollar hit a 2-1/2 month high against the euro and a six-week high versus a currency basket. Stocks of copper, used in power and construction, rose 3,650 tonnes to 470,800 tonnes. Stocks are at their highest since mid-April, having climbed almost consistently since mid-July as Chinese buying has cooled. "They will keep increasing because demand is not keeping pace with supply," Weinberg said of inventories. SUPPLY SIDE Australia's Macquarie Bank predicts a global copper supply deficit is looming this year that will take two years to correct, increasing its 2010/11 copper price forecasts by 2-3 percent to $3.25-3.40/lb ($7,166-$7,500 a tonne). Australia slashed its forecasts for copper production and exports for fiscal 2010, blaming disruptions at BHP Billiton's giant Olympic Dam mine for what would be the nation's lowest output in a decade. Copper has more than doubled this year, bolstered by hefty purchases from China, the world's top consumer of the metal. "Though much of the focus this year has been on China's soaring base metals imports...China has also been securing long-term access to the resources it needs to continue to drive its growth through strategically investing in foreign mining assets," Barclays Capital said in a note. "As China's economic growth continues to power ahead, it faces a major challenge in keeping up with growing demand for raw materials, many of which it is not well endowed with." Among other base metals, aluminium traded at $2,231 from $2,260. Stocks of the metal used in transport and packaging leapt 21,400 tonnes to around 4.6 million tonnes, within a whisker of this year's record high levels. Recovering prices and demand have encouraged aluminium smelters to restart idled capacity in recent months, a move which analysts say could hit aluminium prices. Aluminum Corp of China Ltd, China's largest aluminium producer, said on Monday it had restarted all its idle aluminium and alumina capacity. Despite inventories near record highs, the aluminium market is tight because around 70 percent of LME stocks are said to be tied up in finance deals. Cancelled warrants of aluminium -- material tagged for delivery and unavailable to the market -- stood at 188,925 tonnes. This is equal to 4 percent of total LME stocks, and 14 percent of remaining LME stocks that are not tied up in deals. Data the day before showed cancelled warrants rose to 193,525 tonnes, which Barclays Capital said was the highest since June 2008. Zinc was at $2,312 from $2,334 and lead was at $2,322 from $2,339.5. Tin was unchanged at $15,300 and nickel was at $16,895 from $16,900. Investors await the verdict of the U.S. Federal Reserve's two-day interest-rate meeting, which kicks off on Tuesday. Metal Prices at 1314 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 310.90 -2.10 -0.67 139.50 122.87 LME Alum 2233.00 -27.00 -1.19 1535.00 45.47 LME Cu 6845.00 -68.00 -0.98 3060.00 123.69 LME Lead 2320.00 -19.50 -0.83 999.00 132.23 LME Nickel 16885.00 -15.00 -0.09 11700.00 44.32 LME Tin 15275.00 -25.00 -0.16 10700.00 42.76 LME Zinc 2311.50 -22.50 -0.96 1208.00 91.35 SHFE Alu 16310.00 -115.00 -0.70 11540.00 41.33 SHFE Cu* 55020.00 30.00 +0.05 23840.00 130.79 SHFE Zin 18415.00 5.00 +0.03 10120.00 81.97 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Sue Thomas)

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