MARKETS-METALS (UPDATE 6) * Copper stocks rise to highest since end-Sept * Zinc stockpiles reach new six-yr peak over 700,000 tonnes * U.S. Chicago PMI, Nov. housing data beat expectations (Adds detail, updates prices By Melanie Burton LONDON, Dec 30 (Reuters) - Copper rose to a record on Thursday and was on track to finish 2010 nearly one third higher as a weaker dollar and widening market deficit seen for next year burnished the metal's allure for investors. Benchmark copper on the London Metal Exchange traded at $9,516 at 1522 GMT, up from a close of $9,400 on Wednesday. The metal used in power and construction earlier hit a record $9,550 a tonne before paring gains after U.S. data beat expectations. Copper has climbed almost thirty percent during 2010, up from $7,375 at the end of December 2009, with just one more day of LME trade on Friday before the new year. "The economic data were uniformly well above expectations, still mixed, but definitely on the positive side in recent weeks, showing U.S. economic improvement," said BNP Paribas analyst Stephen Briggs. "If anything base metals prices and gold have slightly softened (on the view), the better the data, the less need there is for further quantitative easing. But we are bang up against the end of the year and I think positioning is more important, given expectations of a (copper) deficit in 2011." The ISM index of Midwest business activity rose in December to 68.6 from 62.5 in November, ahead of expectations for 61.0. Contracts for pending sales of previously owned U.S. homes rose faster than expected in November, though they remained below "normal" activity levels. Also, weekly jobless claims fell to the lowest levels since July, 2008, and the dollar trimmed losses. A weaker dollar makes commodities less expensive for holders of other currencies. "People are very positive on copper, people are expecting it to be higher next year because of the expected market deficit," said analyst Andrey Kryuchenkov of VTB Capital. The global market for refined copper stood in a 436,000 tonne deficit between January to September, an industry body said last week, while analysts more generally expect a widening deficit next year as emerging market demand eclipses output pinned back by a decline in giant mines. YEAR END INCLINE Stockpiles of most metals have grown in LME-bonded warehouses during December as industry and trade destock to cut storage and insurance costs over the year end. Copper stockpiles rose by 5,050 tonnes, the latest data showed, and at 376,000 tonnes stand at the highest since late September. However, they have still fallen by one third from cycle highs of over 550,000 tonnes hit in February. In other metals, zinc inventories popped above the 700,000 tonne mark to the highest levels in six years, amid lack of demand for the metal used by the steel galvanising sector. Inventories of nickel and tin are near the highest in six months, while lead inventories are not far from the highest in 10.5 years. In warrant holdings and cash contracts, a dominant copper position has fallen into the 50-80 percent bracket from the 80-90 percent bracket, the latest LME data showed. Industrial metals markets have since the middle of November been watching the dominant position, the holder of which the LME has not identified, and which gives holders access to the metal used in power and construction. In prices, three-month aluminum changed hands at $2,455 a tonne, in line with Wednesday. Lead and zinc hit new six-week highs, before paring an advance. Lead traded at $2,537, up from $2,531, while zinc stood at $2,425 from $2,398 a tonne. Stainless steel material nickel changed hands at $23,950 having finished on Wednesday at $23,845, while tin, used in electrical solder, was seen at $26,800 from $26,550. Metal Prices at 1537 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 436.35 5.35 +1.24 334.65 30.39 LME Alum 2457.00 2.00 +0.08 2230.00 10.18 LME Cu 9510.00 110.00 +1.17 7375.00 28.95 LME Lead 2545.00 14.00 +0.55 2432.00 4.65 LME Nickel 23925.00 80.00 +0.34 18525.00 29.15 LME Tin 26700.00 150.00 +0.56 16950.00 57.52 LME Zinc 0.00 -2398.00 -100.00 2560.00 -100.00 SHFE Alu 16815.00 70.00 +0.42 17160.00 -2.01 SHFE Cu* 70820.00 1310.00 +1.88 59900.00 18.23 SHFE Zin 19620.00 255.00 +1.32 21195.00 -7.43 ** Benchmark 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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