MARKETS-METALS (UPDATE 5) * Traders await for a slew of U.S. macro data for direction * Copper inventories up nearly 5,000 tonnes (Updates prices and comments) By Humeyra Pamuk LONDON, Nov 24 (Reuters) - Copper fell on Tuesday after a hefty jump in inventories highlighted weak physical demand, but it cut losses as the dollar trimmed some of its gains while traders awaited macroeconomic data from the United States. Despite growing stockpiles analysts see scope for further price rises in copper on the back of robust investor interest, which pushed the metal above $7,000 a tonne on Monday, its highest since September 2008. U.S. third quarter GDP figures and consumer confidence data later in the day will provide market direction, traders said. Copper for three months delivery on the London Metal Exchange fell to $6,895 a tonne in open outcry trade, versus $6,950 a tonne on Monday, when it rallied to a 14-month high of $7,010 a tonne. "LME inventories continue to climb. It is a bit of a worrying trend, showing the underlying demand is not there," said analyst Marc Elliott at Fairfax. "With a stronger dollar, people get a bit more risk averse," he said, meaning demand for metals wanes. The dollar gave up earlier gains and was 0.04 percent down against a basket of currencies. "Currencies are a pretty big theme these days," an LME trader said. "If the euro/dollar breaks above $1.50 then we could see further gains in copper, even though there are no fundamentals to support it," he said. Stocks of copper, used mainly in construction, rose 4,725 tonnes to 429,650 tonnes, the highest since end-April. Stocks have climbed 67 percent since end-July. China's latest copper imports figures on Monday further reflected the poor demand outlook. Refined imports were down by 40 percent in October and traders did not see Chinese buying resuming at copper's current higher price levels. CONTINUE TO RALLY But several analysts saw room for further gains, as the driver of copper prices is not the metal's underlying fundamentals but rather the investment money that is being poured into commodities as risk appetite increases. "It is all about the money coming into the copper market," another LME trader said. "The rally has nothing to do with the fundamentals," he said. For the longer run, there's a consensus among analysts that copper offers good returns with supply getting tighter, now and in the future. Despite weak demand this year, figures from the International Copper Study Group showed copper consumption exceeded production in the first eight months of this year. The market was in a deficit of 32,000 tonnes, versus a deficit of 117,000 tonnes in the same year-ago period. Among other base metals, aluminium fell $10 to $2,028 in light trade. A strike at Guyana's biggest bauxite mine was unlikely to lift metal prices. A union leader said workers at the 2.5 million tonne-per-year Aroaima mine owned by UC Rusal were resisting pressure by the company to accept layoffs in return for a 10 percent wage increase for remaining workers. The operation supplies enough bauxite for more than 600,000 tonnes of primary aluminium annually. "This won't have any implications for the metal, unfortunately," said a Shanghai trader with a long position in the metal. Stainless steel ingredient nickel traded at $16,775 a tonne from $16,905, zinc at $2,250.5 from $2,272, lead was bid at $2,380 from $2,410 and tin was at $15,025 from Friday's last bid at $15,150 a tonne. Metal Prices at 1312 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 313.35 0.00 +0.00 139.50 124.62 LME Alum 2028.00 -10.00 -0.49 1535.00 32.12 LME Cu 6890.00 -60.00 -0.86 3060.00 125.16 LME Lead 2372.00 -38.00 -1.58 999.00 137.44 LME Nickel 16665.00 -240.00 -1.42 11700.00 42.44 LME Tin 14980.00 -170.00 -1.12 10700.00 40.00 LME Zinc 2242.00 -30.00 -1.32 1208.00 85.60 SHFE Alu 15560.00 -290.00 -1.83 11540.00 34.84 SHFE Cu* 53880.00 -1140.00 -2.07 23840.00 126.01 SHFE Zin 18160.00 -365.00 -1.97 10120.00 79.45 ** 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 Humeyra Pamuk, Editing by Keiron Henderson) ((humeyra.pamuk@reuters.com; Reuters Messaging: humeyra.pamuk.reuters.com@reuters.net; +44 20 7542 9736)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))

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