MARKETS-METALS (UPDATE 3) * Dollar holds gains, pressures metals * Aluminium, zinc stocks fall; no price boost * Tin at highest since September 2008 (Recasts, updates prices and comments, previous SINGAPORE) By Humeyra Pamuk LONDON, Jan 12 (Reuters) - Industrial metals slipped on Tuesday on the back of a stronger U.S. dollar, and selling pressure due to index rebalancing, while bearish results from major aluminium producer Alcoa dampened market sentiment. Tin was the only metal that bucked the trend, rising 2.5 percent to hit its highest since September 2008, as the fundamentals for the metal have improved after recent upbeat data and tighter exports from the top producer Indonesia. Benchmark copper for delivery in three months on the London Metal Exchange edged down to $7,555 a tonne by 1100 GMT, from Monday's $7,567.5 a tonne. The metal, used extensively in construction, touched a seventeen-month high last week. The dollar was flat a basket of currencies, holding on gains made after an official from a Chinese sovereign wealth fund said he did not think the U.S. currency would depreciate more. "One reason why metals are falling is the dollar," said metals analyst Daniel Brebner at Deutsche Bank. "Also Alcoa numbers that came after the market's close yesterday were pretty weak and are dampening the market," he said. Alcoa Inc, one of the world's largest aluminium producers, posted a narrower quarterly loss on Monday, but the results fell short of expectations. The company said although aluminum prices are climbing, demand from some customers, especially plane makers and the commercial construction sector, was not expected to improve soon. DISCONNECT In the face of persistently weak demand, rising global stockpiles are a major concern among investors. Chile's mining minister warned on Monday that copper prices could face a downward correction as inventories climb. Copper stocks rose by 1,975 tonnes to 517,175 tonnes, their highest since March 2009, while nickel stocks are at 159,726 tonnes, just below Monday's record high of 159,792 tonnes. "The feedback from the physical desk echoes what the Chileans are saying -- demand is pretty lacklustre -- indeed, producers are asking if we can take more material," a senior trader based in Singapore said. "There are periods of disconnects between the fundamentals and prices and this is clearly one of those periods. The prices are looking a little over extended at this point," Brebner said, adding that there could be further falls for zinc. LME zinc inventories fell by over 2,000 tonnes, but a 30 percent rise in Shanghai zinc stocks offset any potential boost to the zinc price which was at $2,543 a tonne versus $2,573 the day before. Aluminium inventories also fell by 3,675 tonnes, but prices were down at $2,321 a tonne from Monday's $2,330 a tonne. Traders said worries about power shortages in China and upbeat assessments on demand from UC Rusal could help ward off a larger decline. Around 70 percent of the total 4.6 million tonnes of aluminium stocks in LME warehouses are said to be tied up in financing deals. Aluminium cancelled warrants -- material earmarked for delivery -- stood at 244,700 tonnes, equivalent to the 18 percent of the remaining 30 percent. Nickel was at $17,997 a tonne from Monday's $17,890 a tonne while lead was at $2,500 a tonne from $2,532 a tonne. Tin rallied as high as $18,350 a tonne, before easing to $18,275 a tonne versus $17,890 a tonne. "We said last month that tin prices were finally threatening to break higher, having traded in a sideways direction since June when they decoupled from the uptrends in the other metals," Standard Bank said in a research note. "Based on our upwardly-revised forecasts, we are looking for a further increase of 29 percent this year as the global economy recovers, demand improves and as restocking gets under way." Metal Prices at 1100 GMT Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 342.85 0.00 +0.00 332.75 3.04 LME Alum 2316.00 -14.00 -0.60 2230.00 3.86 LME Cu 7551.00 -16.50 -0.22 7375.00 2.39 LME Lead 2494.00 -38.00 -1.50 2432.00 2.55 LME Nickel 17945.00 55.00 +0.31 18525.00 -3.13 LME Tin 18150.00 250.00 +1.40 16950.00 7.08 LME Zinc 2543.00 -30.00 -1.17 2560.00 -0.66 SHFE Alu 18065.00 5.00 +0.03 17160.00 5.27 SHFE Cu* 61650.00 -480.00 -0.77 59900.00 2.92 SHFE Zin 21285.00 -265.00 -1.23 21195.00 0.42 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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