MARKETS-METALS (UPDATE 4) * LME nickel stocks hit record high * Financing deals support aluminium * Intensity of China demand easing (Adds official prices) By Pratima Desai LONDON, Jan 25 (Reuters) - Copper steadied on Monday, but is expected to come under pressure from U.S. plans to rein in bank trading activities and further monetary tightening in China, the world's largest consumer of industrial metals. Traders said the softer dollar and investors looking for a bargain were helping buoy metal prices. Benchmark copper on the London Metal Exchange was untraded in official rings, but bid at $7,425 a tonne compared with $7,390 at the close on Friday when the metal used in power and construction tumbled to a one-month low of $7,194. Last week U.S. President Barack Obama threatened to fight Wall Street banks with a proposal to limit financial risk taking, which he blames for the crisis that engulfed markets last year. "Clearly a lot of money in commodity markets is from proprietary trading and if the major players are not allowed to participate then liquidity drains away," said Robin Bhar, an analyst at Calyon. "China tightening fears are still with us, but the data is an indication of how strong the Chinese economy is." China's economy ended 2009 with a flourish. The country recorded 10.7 percent year-on-year gross domestic product growth in the fourth quarter. But data also showed inflationary pressures, which are on the rise, fuelling expectations of further tightening measures by China's central bank to keep the economy from overheating. "There is a growing sense, in our view, that the intensity of demand at the margin is falling in China for certain commodities such as copper," Deutsche Bank said in a note. "While demand for copper is likely to remain strong in 2010, the components of demand are likely to change, from more infrastructure related sources to consumer products such as automobiles and white goods." SCRAMBLE Traders said high stocks of base metals in LME warehouses were also weighing on prices. Stocks of copper in LME warehouses at above 533,000 tonnes are near their highest since late February last year and more than double the levels since the middle of July 2009. Nickel stocks hit a record high of 162,786 tonnes. Prices of the metal used to make stainless steel was bid at $18,400 a tonne from $18,310 on Friday. "Stainless producers are cutting back again," a metals trader said. "There is going to be a very large surplus in the nickel market this year." Oversupply is also a feature of the aluminium market. Stocks in LME warehouses at about 4.63 million tonnes are near the record 4.64 million tonnes set last week. Aluminium traded at $2,246 from $2,232. Prices of the metal used in transport and packaging have been supported by financing deals between banks and producers. These deals release cash for producers and earn high returns for banks. "Premiums for physical material are rising because consumers are having to scramble for material, which is tight. It sounds bizarre, but that's a fact of today's market," Bhar said. Zinc, used for galvanising steel, traded at $2,344 a tonne from $2,350 on Friday, battery material lead was bid at $2,250 from $2,237 and tin traded at $17,800 a tonne from $17,775. Metal Prices at 1309 GMT Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 337.00 2.30 +0.69 334.65 0.70 LME Alum 2242.00 10.00 +0.45 2230.00 0.54 LME Cu 7415.00 25.00 +0.34 7375.00 0.54 LME Lead 2247.00 10.00 +0.45 2432.00 -7.61 LME Nickel 18365.00 55.00 +0.30 18525.00 -0.86 LME Tin 17650.00 -125.00 -0.70 16950.00 4.13 LME Zinc 2331.00 -19.00 -0.81 2560.00 -8.95 SHFE Alu 17195.00 135.00 +0.79 17160.00 0.20 SHFE Cu* 59850.00 370.00 +0.62 59900.00 -0.08 SHFE Zin 19875.00 65.00 +0.33 21195.00 -6.23 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Pratima Desai; editing by Sue Thomas)

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