FRX: METALS-Copper drops on higher dollar, tin hits record
MARKETS-METALS (UPDATE 3)
* Tin strikes record at $31,800 a tonne
* Aluminium stocks within a whisker of a record high
(Updates with official prices)
By Rebekah Curtis
LONDON, Feb 11 (Reuters) - Copper slipped on Friday, falling further from this week's record high as a rising dollar and concerns about Chinese demand dented sentiment, and tin hit an all-time peak as supply concerns lingered.
Copper for three-months delivery on the London Metal Exchange traded at $9,905 a tonne in official rings from a close of $9,951 on Thursday.
Worries about the demand outlook in China lingered after the world's top copper consumer on Tuesday raised interest rates to mop up cash from its fast-growing economy in order to rein in inflation.
"There's more and more evidence that the trend of interest rates is up," BNP Paribas analyst Stephen Briggs said.
But analysts stayed broadly confident that Chinese demand for the metal used in power and construction would hold strong.
"China will continue to be a big net importer of copper this year," Briggs said. "Demand for all base metals will continue to grow."
Copper struck a record high of $10,160 a tonne on Monday on the back of concerns about supply, as well as improving economic data that bode well for demand.
Tin earlier struck a record high of $31,800 a tonne. Untraded in rings, it was bid at $31,600 from $31,500 at Thursday's close.
"If you take a view for the next few months, sentiment is still very positive," Daniel Briesemann, an analyst at Commerzbank, said of copper. "The major driver is supply constraints...," he said "...with tin as well."
Stocks of copper in LME warehouses fell 225 tonnes to 396,725 tonnes, but a recent trend of rising stocks has raised some concerns about the demand outlook.
Underscoring these worries, Shanghai copper stocks rose nearly 10,000 tonnes to 144,197 tonnes.
DOLLAR GAINS
Deterring non-U.S. investors, the dollar rose versus other major currencies after data underscored recovery in the U.S. jobs market. Concerns about debt problems in Europe weighed down on the euro.
Investors also kept an eye on political tensions in Egypt that have knocked risk sentiment.
Aluminium was at $2,510 a tonne in rings from $2,537. Stocks of the metal used in transport and packaging fell 2,325 tonnes but were just 41,300 tonnes off a record high of 4,640,750 tonnes hit on Jan. 20, 2010.
Vast amounts of the metal used in transport and packaging have been tied up under cheap rent and financing deals, where metal holders profit if prices rise faster than storage costs.
"More is going to come in, much more." said RBC Capital's Alex Heath. "Metal is locked up in deals.
These deals can exist within exchange warehousing systems, or off exchange, in which case the metal is not visible to the market.
"If you're a physical producer or a merchant then you're rubbing your hands with glee," Heath added. "The price has been defended very effectively by this financial mechanism."
Zinc, untraded in rings, was bid at $2,434 from $2,448 a tonne and battery material lead was at $2,507 in rings from $2,510 a tonne.
Stainless steel material nickel was at $27,850 in rings from a close of $27,875 a tonne.
In industry news, ThyssenKrupp AG, Germany's biggest steelmaker, stuck to profit goals as robust demand from its home turf and emerging markets outweigh rising losses at its new U.S. and Brazilian plants.
The group said net profit in the three months to end-December nearly halved to 101 million euros ($138 million).
Data in focus on Thursday included Thomson Reuters/University of Michigan preliminary February consumer sentiment numbers, due at 1455 GMT. (Editing by William Hardy)