MARKETS-METALS (UPDATE 5)
* Copper dips towards $7,800, after $8,000 level this week
* Speed of rally worries; investors bet on medium-term
(Updates prices, adds comment)
By Humeyra Pamuk and Rebekah Curtis
LONDON, April 8 (Reuters) - Copper dropped nearly 2 percent to a one-week low on Thursday, as investors questioned whether this week's peak above $8,000 exceeded fundamentals.
Prices also took their cue from a weak euro, which neared this year's low against the dollar due to growing doubts about Greece's ability to manage its debt crisis.
Copper for three-months delivery on the London Metal Exchange fell to $7,805 a tonne, its lowest since April 1 and was at $7,869 a tonne at 1433 GMT versus $7,945 on Wednesday.
The metal used in construction and power hit $8,010 a tonne earlier this week, its highest since August 2008 and around $1,000 away from an all-time high of $8,940 struck in July 2008.
"A lot of people had $8,000 as a target for the market, and now we're seeing some profit taking," said Daniel Smith, an analyst at Standard Chartered. "With a strong dollar and renewed worries about Greece, that's adding to some weakness."
Analysts questioned the sustainability of this week's 20-month high in copper, as they are still concerned about the pace of the global economic recovery.
"We're seeing restocking, but it's a question about whether it's a sustainable recovery," Smith said.
March imports of unwrought and semi-finished copper products in China likely stayed flat or fell slightly from a month ago as margins for profit-driven spot inflows sank.
BETS ON LONG-TERM COPPER
At the CRU/CESCO conference in Chile, the chief executive of Freeport-McMoRan seemed to bet on the long-term view too, saying he was not ready to go all out on expansions until demand had recovered in most of the world, but he remained "enormously enthusiastic" about copper's long-term outlook.
"Copper's got extremely positive fundamentals going forward and a lot of this price is built on expectations for tighter conditions in the medium term," analyst Carl Firman at Virtual Metals said.
In other metals, nickel also slipped to its lowest in over a week at $24,269 a tonne and traded at $24,626 a tonne from $24,725, but it was still the strongest performer of the year, having risen more than 30 percent since January.
Nickel's price prospects look undimmed, analysts said, due to supply tightness and a recovery in the stainless steel industry, which accounts for about two thirds of nickel demand.
Nickel stocks at LME warehouses dropped by 342 tonnes to 155,670 tonnes, their lowest since late December and down 6.5 percent since a record high of 166,476 tonnes in early February.
On Thursday, cancelled warrants -- material earmarked for delivery -- rose to 6,366 tonnes, the highest so far this year, with 3,324 tonnes of cancellations having occurred this week.
Zinc was at $2,380.5 from $2,400 and aluminium was at $2,348 a tonne from $2,352. Battery material lead was at $2,284 from $2,290. Tin traded at $18,640 a tonne from $18,575. Metal Prices at 1435 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 355.20 -4.00 -1.11 332.75 6.75 LME Alum 2342.00 -10.00 -0.43 2230.00 5.02 LME Cu 7864.00 -81.00 -1.02 7375.00 6.63 LME Lead 2277.00 -13.00 -0.57 2432.00 -6.37 LME Nickel 24575.00 -150.00 -0.61 18525.00 32.66 LME Tin 18525.00 -50.00 -0.27 16950.00 9.29 LME Zinc 2373.00 -27.00 -1.13 2560.00 -7.30 SHFE Alu 16630.00 -155.00 -0.92 17160.00 -3.09 SHFE Cu* 61800.00 -950.00 -1.51 59900.00 3.17 SHFE Zin 19025.00 -465.00 -2.39 21195.00 -10.24 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Nicholas Trevethan; editing by Keiron Henderson)
