* Tin hits new contract highs, spot market sales dwindle * Focus on China industrial production next week * COMING UP: US weekly jobless, PPI at 1230 GMT (Updates with official prices) By Melanie Burton LONDON, Oct 14 (Reuters) - Copper hit a fresh 27-month peak and tin reached a new contract high on Thursday, leading base metals higher as the dollar fell and expectations grew of renewed demand from emerging markets. Three-month copper CMCU3 on the London Metal Exchange was untraded in official rings but quoted at $8,415/8,415.50 a tonne versus Wednesday's close of $8,362 a tonne. The metal, used extensively in construction, hit $8,490 a tonne, its highest since early July 2008. Copper has rallied by around 40 percent since hitting a low in June and is only about $500 away from an all-time high of $8,940 a tonne struck in July 2008. "It's all dollar-led. At the minute you don't have to be a metals strategist, you have to be an FX strategist," said Citi analyst David Thurtell. The talk of quantitative easing in the United States to give a boost to the world's largest economy has been knocking down the dollar and benefiting commodities. On Thursday the dollar's tumble against a basket of currencies sparked a rally across major commodities such as gold and base metals. Crude oil reached five months highs above $84 per barrel while gold hit a new record above $1,387 per ounce. But while the deteriorating dollar has been a major driver behind the recent rally, fundamentally the market remains tight for metals such as copper and tin with miners struggling to keep up with demand from developing markets in particular. "Emerging markets have been proven to be more than capable of being the locomotive when it comes from commodity demand," added Citi's Thurtell. "People are wondering why copper is above $8,000 when the U.S., UK, Europe, Japan are still in a hole, but the bigger picture is a pretty strong emerging market," he added. China, the world's top consumer of base metals, will release its third quarter and September economic indicators next week, which are expected to show growth continues at a robust pace of 9.5 percent. [ID:nTOE69D042] Data that could sway metals markets today via movements in the currency markets includes weekly U.S. jobless claims as well as the U.S. producer price index for September at 1230 GMT. SPOT SALES FALL Tin continues to print historic highs amid dwindling supply from the world's top exporter Indonesia due to heavy rains that have disrupted production and dwindling grades of ore. [nSGE6950G3] [ID:nJKB004039] "The production problems in Indonesia, the world's second largest producer and largest exporter of tin, are increasing," said Commerzbank in a note. Indonesia's state miner PT Timah Tbk (TINS.JK) accounted for over 40 percent of Indonesia's total tin production last year, it said. "The company has...stopped its tin sales on the spot market for now and is currently trying to negotiate new supply contracts with its long-term customers. This should mean further headroom for tin prices in the near term, despite the new record high of over $27,000 a tonne," Commerzbank said. The latest LME data showed that tin stocks held in LME-bonded warehouses rose by 135 tonnes net today, but they remain close to their lowest in almost one and a half years. [0#LME-STOCKS] Three month tin CMSN3 was last seen at $27,250 per tonne, having printed a new high of $27,337.50 earlier. Across other metals, energy-intensive metal aluminium CMAL3 hit its highest since April at $2,459 per tonne before cutting gains to $2,434 per tonne, up from $2,417 per tonne on Wednesday's close. Zinc CMZN3, used in galvanising, rallied to $2,442.50 also its highest in nearly six months, and traded at $2,427 per tonne, against a $2,410 close. Sister metal lead CMPB3 at $2,432 was up from $2,435 per tonne on the close. It printed its highest since January at $2,473 earlier. Nickel CMNI3, used in stainless steel, lagged other metals, at $24,500 per tonne it was up from $24,400, still around $700 short of multi-month highs touched earlier this month. Metal Prices at 1217 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2009 Ytd Pct move COMEX Cu 383.65 1.95 +0.51 334.65 14.64 LME Alum 2433.00 16.00 +0.66 2230.00 9.10 LME Cu 8415.00 53.00 +0.63 7375.00 14.10 LME Lead 2432.00 -3.00 -0.12 2432.00 0.00 LME Nickel 24495.00 95.00 +0.39 18525.00 32.23 LME Tin 27325.00 550.00 +2.05 16950.00 61.21 LME Zinc 2427.00 17.00 +0.71 2560.00 -5.20 SHFE Alu 16440.00 -5.00 -0.03 17160.00 -4.20 SHFE Cu* 63760.00 980.00 +1.56 59900.00 6.44 SHFE Zin 19310.00 135.00 +0.70 21195.00 -8.89 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Melanie Burton; editing by Keiron Henderson)

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