* Copper set for third consecutive weeks of falls
* Equities fall, gold at record high as risk aversion takes hold
* Aluminium stocks show influx into Vlissingen
(Updates prices)
By Harpreet Bhal
LONDON, Aug 19 (Reuters) - Copper steadied on Friday, helped by a weak
dollar, although growing concerns about a slowdown in the United States and a
debt crisis in Europe weighed on sentiment and capped further gains for the
metal.
Benchmark copper was $8,865 a tonne at 1406 GMT, from Thursday's
close of $8,774 a tonne. The metal used in power and construction earlier fell
to a low of $8,700, its lowest level since Aug. 11.
"Short-term we are negative on base metals and we think that cautiousness is
warranted at this point in time," said Arne Lohman Rasmussen, analyst at Danske
Bank.
Copper prices have fallen more than 10 percent so far this month, and are on
track to post a third consecutive week of falls. It shed more than 2 percent on
Thursday.
Investors have grown increasingly uneasy after disappointing data from the
United States prompted fears a slowdown in the world's largest economy would hit
global growth prospects, compounded by a worsening debt crisis in the euro zone.
Investors dumped assets perceived as risky, such as stocks, in favour of
safe-haven gold, which surged to a fresh record high.
The dollar edged lower against a basket of currencies, offering a modest
boost to metals prices. A weak dollar makes commodities priced in the U.S. unit
cheaper for holders of other currencies.
"We know that there are some long positions (in base metals) out there that
could easily be squared out especially if we start to see euro/dollar moving
lower and we see a risk of that," Rasmussen said.
FUNDAMENTALS INTACT
Supply threats in Latin America are also on investors' radar screens.
Workers at Chile's Collahuasi, the world's No. 3 copper mine, have threatened a
one-day stoppage on Sept. 2 if the company does not hire back workers fired
after a previous disruption.
"Setting aside the weak macro environment, copper's fundamentals remain well
supported. Risks of short-term disputes and potential supply outages remain,"
ANZ said in a note.
In a further boost to copper, inventories in warehouses monitored by the
Shanghai Futures Exchange fell 7.3 percent from last Friday, raising
expectations that destocking in China was under way . Aluminium stocks
fell by 5.8 percent.
"China has already taken advantage of the fall in prices since the start of
the month and bought copper especially in anticipation of a global supply
deficit. This should be reflected in higher imports in the coming months,"
Commerzbank said in a note.
"Copper imports have already picked up again in the last two months, not
least because of attractive arbitrage opportunities between the exchanges in
London and Shanghai."
China accounts for nearly 40 percent of global copper demand, estimated at
around 19 million tonnes this year.
More than 100,000 tonnes of aluminium flowed into London Metal Exchange
registered warehouses in Vlissingen, latest LME data showed, in another big
increase that has inflated stocks in the Dutch port to over 700,000 tonnes
About 70 percent of aluminium stocks are tied up in financing deals, and
analysts say these deals are unlikely to be unwound soon given the limited
money-making opportunities available to banks facing historically low interest
rates.
A typical deal consists of banks buying nearby aluminium from a producer,
selling it forward at a profit and striking a warehouse deal to store it cheaply
for an extended time period.
Aluminium was $2,361 a tonne, from a last bid of $2,338 a tonne on
Thursday.
Tin was $22,875 a tonne. It closed at $22,750 on Thursday when it
fell by more than 5 percent.
The latest government crackdown on the Indonesian tin industry will dampen
some production and support benchmark prices, but the uncertain economic and
demand outlook will play a bigger role in the market, analysts said.
Zinc rose to $2,196 a tonne, from $2,178 while lead was
$2,316 from Thursday's close of $2,301. Nickel was $21,383 from $21,300.
Metal Prices at 1411 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2010 Ytd Pct
move
COMEX Cu 400.10 3.50 +0.88 444.70 -10.03
LME Alum 2345.00 -50.00 -2.09 2470.00 -5.06
LME Cu 0.00 -8774.00 -100.00 9600.00 -100.00
LME Lead 0.00 -2301.00 -100.00 2550.00 -100.00
LME Nickel 21505.00 205.00 +0.96 24750.00 -13.11
LME Tin 23200.00 450.00 +1.98 26900.00 -13.75
LME Zinc 0.00 -2178.00 -100.00 2454.00 -100.00
SHFE Alu 17250.00 45.00 +0.26 16840.00 2.43
SHFE Cu* 66350.00 -350.00 -0.52 71850.00 -7.65
SHFE Zin 16885.00 -145.00 -0.85 19475.00 -13.30
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
