LONDON, April 22 (Reuters) - Copper turned negative on Thursday, weighed by persistent worries of further monetary tightening from China, the world's top metals consumer, and a firmer dollar.
By 1012 GMT, copper for three month delivery CMCU3 on the London Metal Exchange fell to $7,716 a tonne from $7,760 at the close on Wednesday and compared with a session high at $7,808.
Earlier this month, copper, used in power and construction, touched $8,043.75, its highest since August 2008 but has struggled to break through the $8,000 level since.
"The momentum petered out a week or so ago when it didn't maintain a push through $8,000, so it is drifting looking for another direction," said David Wilson, director of metals research at Societe Generale.
The market appears worried that China may be oversupplied with copper after imports in March jumped by more than 50 percent to 337,125 tonnes. [ID:nTOE63K02M]
"It was initially seen as bullish but is now being seen as China having far too much copper," said Wilson. "Add onto that the continued conveyer belt of news on tightening in China ... is concerning a few people out there in the copper market."
Last week China raised mortgage rates and down payment requirements to cool growth in the property sector, a major user of copper pipes and wiring. [ID:nTOE63E08N]
Analysts added that continued concerns on Greek debt and any wider impact from a lawsuit against Goldman Sachs were seen keeping risk seekers at bay. [ID:nN19193616] [ID:nLDE63L0JV]
The euro recouped earlier losses but remained under pressure on concerns about the Greek debt crisis and its impact on other peripheral euro zone countries. The dollar was broadly firmer, making metals priced in the U.S. unit more expensive for holders of other currencies. [USD/]
"We had this mini-deflation last Friday when the Goldman news broke but since then the market has been nervously looking around for other news," said Herwig Schmidt, head of sales at Triland Metals. "We had extreme dollar firmness yesterday ... on the other hand we still have firm buying from China."
WAREHOUSE MOVEMENTS
Falls in LME warehouse stocks have also been watched in recent weeks for signs of an uptick in demand, but this has slowed.
Copper stocks fell 675 tonnes to 507,125 tonnes, down from 555,075 hit on Feb. 17 -- their highest point since October 2003.
Aluminium CMAL3 traded at $2,331.50 versus $2,351. LME stocks for the metal, used in transport and packaging, gained 2,325 tonnes to remain near record highs at 4.57 million tonnes.
A large portion of those aluminium stocks are tied up in financial deals, to release cash for producers and to earn banks higher returns than they would get in money markets. [ID:nGEE5BA277]
Among other metals, steel making ingredient nickel CMNI3 traded at $27,041 from $26,975 while battery material lead CMPB3 was at $2,315 from $2,320.
Chatter among metals traders is focussing on dominant positions within the smaller LME metal markets, especially nickel.
"A single market player held over 40 percent of all short positions in nickel due this month at the end of last week," Commerzbank said in a note. "In view of the recent rise in prices, this investor may probably have been forced to buy back these positions to avoid further losses."
"This was probably a contributing factor in the sharp rally of nickel prices and is likely to lend further support to prices in the coming days too."
For the latest LME data on nickel positions, click
Zinc CMZN3 traded at $2,420 a tonne from $2,425 and tin CMSN3 was at $19,000 from a quoted price at $19,000/$19,050.
Metal Prices at 1014 GMT Metal Last Change Pct Move End 2009 Ytd Pct
move COMEX Cu 353.30 0.00 +0.00 332.75 6.18 LME Alum 2330.00 -21.00 -0.89 2230.00 4.48 LME Cu 7715.00 -45.00 -0.58 7375.00 4.61 LME Lead 2309.00 -11.00 -0.47 2432.00 -5.06 LME Nickel 26925.00 -50.00 -0.19 18525.00 45.34 LME Tin 18875.00 -375.00 -1.95 16950.00 11.36 LME Zinc 2417.00 -8.00 -0.33 2560.00 -5.59 SHFE Alu 16620.00 -70.00 -0.42 17160.00 -3.15 SHFE Cu* 60660.00 -270.00 -0.44 59900.00 1.27 SHFE Zin 18930.00 -100.00 -0.53 21195.00 -10.69 ** 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 Nick Trevethan in Singapore; editing by Michael Hogan)
