MARKETS-METALS (UPDATE 3)
* Demand doubts reemerge, eyes on China and U.S.
* U.S. May housing starts trigger sell-off
* Coming up: U.S. May consumer prices due at 1230 GMT
(Recasts, adds comment/details, pvs Shanghai)
By Pratima Desai
LONDON, June 17 (Reuters) - Copper prices slid on Thursday, as worries about demand from top consumers the United States and China returned to haunt the market and traders noted the first rise in stocks a month.
Benchmark copper on the London Metal Exchange fell to $6,472 a tonne in early trade. The metal used in power and cosntruction was trading at $6,546 a tonne at 0956 GMT from $6,655 a tonne at the close on Wednesday.
Copper has in recent days been boosted by a firmer euro against the dollar, on perceptions that the debt crisis in the euro zone may be easing and on strong manufacturing data from the United States, the world's largest economy.
But doubt about growth and demand prospects has reemerged.
"There are so many macro risks at the moment hanging over the market, why would you want to be exposed," said Max Layton, analyst at Macquarie. "The market is looking ahead to a seasonal slowdown in demand from China and other places."
The trigger for the sell-off, which saw copper retreat from a two-week high of $6,775 a tonne on Wednesday was May U.S. housing starts, which fell 10 percent from the previous month, to their lowest level in five months.
"The data points out that the housing market will struggle to grow now that the government tax credit stimulus plan has ended," Harbor Intelligence said in a note.
News on Wednesday that U.S. industrial output rose 1.2 percent in May from April only partially offset the gloom.
FLAT PRODUCTION
Latest data shows copper stocks in LME warehouses rose 1,025 tonnes to 460,175 tonnes, the first rise since mid-May.
Falling stocks since the middle of February are one reason why copper hit a year high above $8,000 a tonne on April 12.
But stocks are more than twice the level they were when copper hit a record high of $8,940 a tonne on July 2, 2008.
LME stocks of nickel also fell 660 tonnes to 131,052 -- a fall of more than 20 percent since a record high of 166,476 tonnes on February 5.
Analysts expect this trend to reverse over the next quarter as demand wanes from stainless steel producers -- which account two-thirds of global consumption estimated at 1.4 million tonnes this year.
"The stainless steel production cycle has flattened out, we will see quarter-on-quarter cuts in the third quarter, nickel prices will come back," Layton said. "Aluminium prices are low enough to lead to significant production cuts in China."
China is the world's largest producer and consumer of aluminium used in transport and packaging.
Aluminium prices have over the past year been supported by financing deals which have tied up about 70 percent of LME stocks -- 4.48 million -- to release cash for producers and earn high returns for banks.
Three-month nickel was trading at $19,790 a tonne from $20,040 on Wednesday, aluminium at $1,995 from $2,005, zinc at $1,780 from $1,829, lead at $1,753 from $1,760 and tin at $17,750 from $17,800. Metal Prices at 0958 GMT Metal Last Change Percent Move End 2009 Ytd Percent
move COMEX Cu 295.20 -4.35 -1.45 334.65 -11.79 LME Alum 1990.00 -15.00 -0.75 2230.00 -10.76 LME Cu 6540.00 -115.00 -1.73 7375.00 -11.32 LME Lead 1750.00 -10.00 -0.57 2432.00 -28.04 LME Nickel 19750.00 -290.00 -1.45 18525.00 6.61 LME Tin 17650.00 -150.00 -0.84 16950.00 4.13 LME Zinc 1777.00 -52.00 -2.84 2560.00 -30.59 SHFE Alu 14495.00 -70.00 -0.48 17160.00 -15.53 SHFE Cu* 51850.00 400.00 +0.78 59900.00 -13.44 SHFE Zin 14220.00 -75.00 -0.52 21195.00 -32.91 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
