MARKETS-METALS (UPDATE 5) * Tin hits highest since Oct 2008 * Aluminium LME inventories strike record high * Copper LME stocks at highest since mid-April (Recasts, adds comment/detail) By Rebekah Curtis LONDON, Dec 18 (Reuters) - Copper eased on Friday as the dollar firmed against the euro and rising inventories dented sentiment, but the threat of a strike in Chile and the likelihood of stronger demand are expected to buoy prices. Benchmark copper on the London Metal Exchange was trading at $6,850 a tonne at 1523 GMT from $6,870 at the close on Thursday. Earlier on Friday the metal used in power and construction rose to $6,926 a tonne. The dollar rose against the euro, making commodities more expensive for holders of other currencies, after reports of Iranian troops briefly entering Iraqi territory on Thursday. Union workers at Chile's Altonorte copper smelter voted to strike after rejecting a pay offer from owner Xstrata, which said it would ask for government mediation. The collective contract expires on December 18. "We expect 2010 to be a stronger year for growth, with better demand," said Calyon analyst Robin Bhar. "Come the new year we would expect more money coming into commodities because of fresh fund inflows." Copper prices have more than doubled this year on the back of hefty buying by top consumer China, which has been absent from the market in recent months, but that slack is expected to be taken up by the United States and other OECD countries. Copper market sentiment was also undermined by stocks in LME warehouses, which at an 8-month high of 476,350 tonnes are up about 85 percent since the middle of July. Copper stocks in warehouses monitored by the Shanghai Futures Exchange rose in the latest week to above 100,000 tonnes. For graphic showing global copper stocks click on http://graphics.thomsonreuters.com/129/GLB_CPRSTK181209.gif "We are not seeing a compelling improvement in the fundamentals of the complex -- best exemplified by rising metal inventories -- that could otherwise offset currency related pressures," MF Global said in a note. LME stocks of aluminium used in transport and packaging hit a record high above 4.6 million tonnes. But prices are immune as about 70 percent of those stocks are tied up in financing deals until May. Expectations are for many of those deals to be renewed, which will help boost aluminium trading at $2,242 a tonne from $2,220 on Thursday and 14-month high of $2,305 on Monday. A shortage of available material is reflected in premiums for physical material over the cash price. Japanese buyers have agreed to roughly 7-13 percent hikes in premiums for the first quarter of next year. Tin earlier hit a 14-month high of $16,000, as analysts cited worries about production cuts in Indonesia, the world's top exporter of the metal. It was at $15,900 a tonne from $15,775 at the close on Thursday, zinc at $2,430 from $2,391 and battery material lead at $2,322 from $2,359. Nickel was at $17,150 from $17,100. Stocks of nickel rose 768 tonnes to 148,458 tonnes, their loftiest level since 1994 and within touching distance of the record high of 151,254 set in November 1994. Metal Prices at 1524 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 319.60 7.50 +2.40 139.50 129.10 LME Alum 2260.00 27.00 +1.21 1535.00 47.23 LME Cu 7020.00 125.00 +1.81 3060.00 129.41 LME Lead 2400.00 40.00 +1.69 999.00 140.24 LME Nickel 17350.00 450.00 +2.66 11700.00 48.29 LME Tin 15350.00 25.00 +0.16 10700.00 43.46 LME Zinc 2435.00 100.00 +4.28 1208.00 101.57 SHFE Alu 16445.00 -15.00 -0.09 11540.00 42.50 SHFE Cu* 55320.00 210.00 +0.38 23840.00 132.05 SHFE Zin 18700.00 95.00 +0.51 10120.00 84.78 ** 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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