METALS-Shanghai copper falls on Dubai woes, dollar

* Dubai woes ripple across markets

* Investors nervous over short-term prospects

By Rujun Shen and Edmund Klamann

SHANGHAI, Nov 27 (Reuters) - Shanghai copper fell nearly 2
percent on Friday, tracking London's losses in the previous
session, as the debt problems in Dubai jangled the nerves of
investors and a rebound in the dollar weighed.

Dubai's debt woes shook the financial world and the trust
of Western investors who had turned to the Gulf region for help
during the financial crisis, sinking global stocks and driving
the dollar higher. [MKTS/GLOB]

"The copper market so far has not fallen as deeply as
feared, as there are uncertainties around the development of
the Dubai problem, and more importantly, investors are still
confident in the economic recovery in the United States," said
Wang Zhouyi, an analyst at Shanghai CIFCO Futures.

"If the Dubai problem gets more serious, copper is likely
to be dragged into correction next week."

Even as metals investors are generally bullish on long-term
prospects, they have turned more cautious and nervous as
uncertainties dominate the short-term market outlook, analysts
and traders said.

"A lot of investors have opted for very short-term trade
lately, and change their positions constantly. They get nervous
when they hear even the leaves rustling in the wind," said Zhu
Yanzhong, an analyst at Jinrui Futures.

"There is no clear direction in the market. Fundamentals
don't support the current prices, as weakened consumption can't
catch up with high prices."

Shanghai's benchmark third-month copper futures contract
SCFc3 fell 1.5 percent to 54,070 yuan a tonne by 0225 GMT,
retreating further from a 14-month peak of 55,500 yuan hit in
the previous session, on course for a 0.7 percent weekly rise.

The most-active contract for March delivery SCFH0 fell
1.7 percent to 54,390 yuan a tonne.

Three-month copper on the London Metal Exchange MCU3
edged up $14 to $6,835 a tonne, nearly unchanged from a week
earlier.

"We are approaching the end of the year, and investors are
getting more cautious. Even though they are in general bullish,
they are not very enthusiastic about pushing prices to new
highs in the near term, as proved by falling open interest,"
said a copper trader based in eastern China's Zhejiang
Province.

On the fundamentals side, Peru's Antamina, one of the
world's largest copper and zinc mines, signed a new three-year
labour contract with its workers, ending four months of tense
negotiations and erasing the spectre of a
strike.[ID:nN26393774]

Japanese smelters expect tough negotiations on next year's
copper processing fees as they face increased competition from
refineries from China and tight global ore supplies.[ID:nT1285]

The Shanghai Futures Exchange is expected to release its
weekly copper warehouse stocks, alongside stocks of other
commodities, after the market closes. Shanghai's copper stocks
had been rising for 4 straight weeks, up 12 percent during the
period to 107,405 tonnes.

Base metals prices at 0225 GMT
Metal Last Change Pct Move End 2008 Pct chg
09
LME Cu 6835.00 14.00 +0.21 3060.00
123.37
SHFE Cu* 54070.00 -830.00 -1.51 23840.00
126.80
LME Alum 2010.00 1.00 +0.05 1535.00
30.94
SHFE Alum* 15540.00 -115.00 -0.73 11540.00
34.66
COMEX Cu** 309.60 -6.90 -2.18 139.50
121.94
LME Zinc 2250.00 -6.00 -0.27 1208.00
86.26
SHFE Zinc 18070.00 -220.00 -1.20 10120.00
78.56
LME Nickel 16500.00 -75.00 -0.45 11700.00
41.03
LME Lead 2355.00 15.00 +0.64 999.00
135.74
LME Tin 14900.00 -70.00 -0.47 10700.00
39.25
LME/Shanghai arb^ 524
Dollar/yuan 6.8268 \ 6.8282
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month
(Editing by Clarence Fernandez)
((rujun.shen@thomsonreuters.com; +86 21 6104-1779; Reuters
Messaging: rujun.shen.reuters.com@reuters.net))
((If you have a query or comment on this story, send an email
to news.feedback.asia@thomsonreuters.com))
Reuters 3000Xtra subscribers can access Metals Production
Database by clicking on URL below
mpd.session.rservices.com
For related news and prices, click on the codes in brackets:
LME price overview RING= COMEX copper futures
<0#HG:>
Base metals news [MET] All metals news
[MTL]
All commodities news [C] Metals diary
[MTL/DIARY]
Foreign exchange rates FX=S SPEED GUIDES COMMODS
<LME/INDEX>