METALS-Copper takes breather after rally, dollar weighs

* LME copper slips but heads for fifth weekly rise

* Analysts raise doubt whether the rally can continue

* Tin jumps more than 5 percent on fund buying

LONDON, April 17 - Copper ticked down on Friday, as a strong dollar prompted investors to cash in profits after a rally that pushed it to a six-month high this week, while tin rallied over 5 percent on fund buying.

Copper for three-months delivery on the London Metal Exchange eased by $9 to $4,720/4,721 a tonne in the open outcry trade, as the euro hit a new one-month high against the dollar.

"I think what we're seeing is just a little bit of consolidation," said analyst Gayle Berry at Barclays Capital. "We've had such strong gains this week so far, the market's just taking a breather," she said.

Upbeat economic data from the United States, one of the top copper consumers in the world, coupled with continuous drawdowns in inventories has sent copper to a six-month high just below $5,000 a tonne earlier this week.

Prices have surged 54 percent so far this year in London, and are heading for a 3 percent gain this week, their fifth consecutive weekly increase.

"LME metals are likely to fall back quickly. The previous gains in copper were a little too high," said Judy Zhu, an analyst at Standard Chartered.

On Friday, inventories in LME registered warehouses fell by 5,575 tonnes to 469,625 tonnes, having fallen nearly 80,000 tonnes since mid-February.

Cancelled warrants -- stock already tagged for delivery -- eased to 64,400 tonnes from 66,275 the previous day. Stocks in Shanghai warehouses rose by 3,969 tonnes.

"Metal keeps flowing into China but at these prices we strongly believe the State Reserves Bureau is out of the market. No one really seems to know where it's going," a trader in Sydney said. Some analysts thought the trend is not sustainable.

Copper cathode imports have surged exceeding the early 2007 peak but total copper imports were up more modestly as scrap and concentrate imports fell, analysts in Citi said in a research note.

"Is it sustainable? Probably not," the bank said. "Cathode imports are being driven by a shortage of scrap, stock building and SRB buying, and is probably well ahead of demand."

Last month China's refined copper output slipped 0.2 percent from February's three-month high to 319,400 tonnes as producers ran short of copper scrap, a raw material, and smelters held back from full production because of weak demand.

Dominant positions controlling more than 90 percent of cash warrants on LME stocks and fund buying have bolstered tin prices. Three-months tin surged to a session high of $12,175 a tonne versus Thursday's $11,550 a tonne.

It was last quoted at $12,050/12,100 a tonne.

"It gets onto the fund and CTA radar and they start buying it, an LME trader said. "The stocks haven't changed a great deal but they're small stocks so there's always the worry for a potential squeeze."

Supply worries for the metals were reflected in the premium for cash material over the three-month contract at $88 a tonne. That was below levels above $200 seen last week, but it above the $32.5 seen in early February.

Lead was supported by similar factors. The premium for lead was small at about $3, but compared with a discount of about $16 in late March.

Lead was $5 higher at $1,509 while zinc was at $1,535 from $1,495 on Thursday. Aluminium was unchanged at $1,482 and nickel rose to $12,550 a tonne from $12,450.

Metal Prices at 1216 GMT Metal Last Change Percent Move End 2008 Ytd Percent

move COMEX Cu 218.35 0.00 +0.00 139.50 56.52 LME Alum 1479.00 -36.00 -2.38 1535.00 -3.65 LME Cu 4750.00 21.00 +0.44 3060.00 55.23 LME Lead 1517.00 13.00 +0.86 999.00 51.85 LME Nickel 12425.00 -25.00 -0.20 11700.00 6.20 LME Tin 12000.00 650.00 +5.73 10700.00 12.15 LME Zinc 1541.00 46.00 +3.08 1208.00 27.57 SHFE Alu 12885.00 75.00 +0.59 11540.00 11.66 SHFE Cu* 39290.00 -1000.00 -2.48 23840.00 64.81 SHFE Zin 13585.00 -145.00 -1.06 10120.00 34.24 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

For graphics showing copper and aluminium stocks. http://graphics.thomsonreuters.com/apr09/GLBCPSTX170409.jpg http://graphics.thomsonreuters.com/apr09/GLBALSTX170409.jpg