* Copper rally stalls again; bulls frustrated and fatigued * China players "dabbling" in copper; physical demand weak * Nickel pennant forming, upside breakout seen on the charts (Updates prices, adds quotes and details) By Nick Trevethan SINGAPORE, Feb 11 (Reuters) - London copper edged higher on Friday, trading around $10,000 a tonne, but an earlier attempt to set a new high was thwarted, and the risk of retracement grew with bullish investors increasingly frustrated by the market's inability to press on. Three-month copper on the London Metal Exchange rose 0.3 percent to $9,976.50 a tonne by 0445 GMT, having touched $10,045 earlier in the day in an abortive rally towards the record high of $10,160 struck at the start of the week. Backing the upbeat tone, U.S. claims for first-time jobless benefits fell more than expected in the latest week to a 2-1/2-year low, data showed. But investors were starting to sell into rallies, traders said. LME copper ended the previous session about a quarter percent higher, but investors may be getting impatient with the metal's inability to choose a path. Copper has surrendered more than 3 percent of its value from the highs, as investors began to question whether the sky-high futures price was justified, given the sluggish state of physical market demand. "There is significant scale-up selling interest each time prices get through $10,000. The market is overheated and there is little appetite in Asia at least to press ahead," said a trader in Hong Kong. "We think it worth selling into strength and waiting for a bigger pullback to go long again, as we expect appetite to pick up and prices to move higher from the second quarter." Shanghai's most active copper contract fell 40 yuan to 75,840 yuan. "Dabbling is the word. I think (Chinese players) got bored on holidays and came back expecting another fireworks show," a trader in Sydney said. Friday's failed attempt to break to new highs refocused technical patterns on the downside, with a longer term target towards $9,300. In other metals, tin rose 1 percent to a record $31,800, buoyed by persistent concerns about supply from top exporter Indonesia. Pressure on physical tin supply may also be mounting after ETF Securities said midweek tin holdings more than doubled to 405 tonnes from 180 tonnes at the end of January. However at just 2.25 percent of the exchange stockpile, holdings would need to continue to rise in order to generate significant tightness. For a column on tin, click: Nickel rose 1.5 percent to $28,278 and there may be a pennant forming in the charts, with a bias to break out to the upside to $29,500. Base metals prices at 0446 GMT Metal Last Change Pct Move YTD pct chg LME Cu 9976.50 25.50 +0.26 3.92 SHFE CU FUT MAY1 75840 -40 -0.05 5.55 LME Alum 2550.00 13.00 +0.51 3.24 SHFE AL FUT APR1 17075 25 +0.15 1.40 HG COPPER MAR1 454.85 3.50 +0.11 2.46 LME Zinc 2449.00 1.00 +0.04 -0.20 SHFE ZN FUT MAY1 19390 -195 -1.00 -0.44 LME Nickel 28278.00 403.00 +1.45 14.25 LME Lead 2521.00 11.00 +0.44 -1.14 LME Tin 31620.00 120.00 +0.38 17.55 LME/Shanghai arb^ 1668 Dollar/yuan 6.5880 \ 6.5890 Shanghai and COMEX contracts show most active months ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Reporting by Nick Trevethan;Editing by Clarence Fernandez)

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