* Germany, France promise to unveil crisis measures * Weak dollar helps base metals rise * Copper stocks show drop, Chinese seen buying on dips By Harpreet Bhal LONDON, Oct 10 (Reuters) - Copper steadied on Monday as the dollar fell and on optimism Europe's policymakers were taking steps to tackle the region's debt crisis, but uncertainty about the fiscal health of the euro zone kept further gains in check. Benchmark copper on the London Metal Exchange (LME) was trading at $7,381 a tonne at 0858 GMT, up from Friday's close of $7,375 a tonne. The metal used in power and construction posted a 5 percent weekly gain last week, its highest since the week beginning April 10. German Chancellor Angela Merkel and French President Nicolas Sarkozy said on Sunday their goal was to come up with a sustainable answer for Greece's debt problems and agree how to recapitalise European banks. But they declined to give any details of their plan. "The market is likely to remain on tenterhooks for a little while yet as far as Europe is concerned. We are still not out of the woods yet," said Nic Brown, head of commodity research at Natixis. "Until we get some sort of longer-term solution and fiscal sustainability in countries like Greece, I don't think we are there yet." Helping prevent further falls was a weak dollar, which fell against a basket of currencies. A weak dollar makes commodities priced in the U.S. unit cheaper for holders of other currencies. "As the state of the weak European financial system hits headlines, we can expect volatile commodity prices - although we could see some stability as European lawmakers continue to show their commitment to recapitalise Europe's financial system," ANZ analysts said in a note. COPPER STOCKS DROP With the Chinese market reopening after a week-long holiday, analysts expect to see a pick-up in Chinese buying but cautioned that it was too soon to tell whether Chinese demand for the metal was starting to improve. Latest data showed copper stocks in LME-registered warehouses dropped 4,575 tonnes, with large amounts leaving warehouses in Korea. The data also showed a jump in copper cancelled warrants, which is the amount of metal earmarked for delivery, in warehouses in Malaysia's Klang, and Korea's Gwangyang, Busan and Incheon Port. "It is clear that the latest correction in LME prices resulted in metal going into China. With the decline in bonded warehouse stocks you are now seeing buying from Chinese merchants feeding into LME stockpiles," Brown said. "Whether this is an indication of strong demand or an indication of opportunistic restocking it's still too early to tell." In other metals, aluminium fell to $2,225.25 a tonne from a close of $2,228 a tonne on Friday. Lead rose to $1,965 from $1,944 on Friday. Data showed lead stocks in LME warehouses rose by 1,600 tonnes to a fresh record high. Zinc traded at $1,935.25 a tonne from Friday's close of $19,20, while tin rose to $23,000 from $22,900. Nickel traded at $18,950 a tonne from $18,910 on Friday. Metal Prices at 0906 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 332.45 5.60 +1.71 444.70 -25.24 LME Alum 2222.00 -6.00 -0.27 2470.00 -10.04 LME Cu 7375.25 0.25 +0.00 9600.00 -23.17 LME Lead 1961.50 17.50 +0.90 2550.00 -23.08 LME Nickel 18950.00 40.00 +0.21 24750.00 -23.43 LME Tin 22865.00 -35.00 -0.15 26900.00 -15.00 LME Zinc 1935.00 15.00 +0.78 2454.00 -21.15 SHFE Alu 16675.00 35.00 +0.21 16840.00 -0.98 SHFE Cu* 54480.00 -310.00 -0.57 71850.00 -24.18 SHFE Zin 15110.00 -290.00 -1.88 19475.00 -22.41 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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