METALS-Copper falls as firmer dollar and high inventories weigh

LONDON, Feb 19 (Reuters) - Copper lost ground on Thursday, giving up some of the previous session's gains as a firmer dollar, rising inventories and reduced demand because of the Lunar New Year holiday in China, the world's biggest metals consumer, weighed on prices.

Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.9% at $12,789 a metric ton as of 1700 GMT. It fell as much as 1.9% earlier in the session after a 2.3% jump on Wednesday.

Chinese traders are mostly away from the market as the Shanghai Futures Exchange is closed, reopening on February 24.

"It's really difficult to read too much into the price action this week," said Ole Hansen, head of commodity strategy at Saxo Bank. "We need to get China back and see what happens then, both on the speculative and also on the physical demand in the following weeks."

DOLLAR-PRICED METALS BECOME MORE EXPENSIVE

The dollar index .DXY firmed after minutes from the U.S. Federal Reserve suggested policymakers were in no hurry to cut interest rates and that several were open to hikes if inflation proved sticky. A stronger dollar makes dollar-priced metals more expensive for holders of other currencies.

Copper stocks in LME-approved warehouses MCUSTX-TOTAL meanwhile increased by another 925 tons to 225,575 tons, the highest since March 2025.

Offsetting the bearish impact of high stocks and the firmer dollar, copper was supported by technicals, Hansen said.

"Since last August, every time we have come down the 50-day moving average has been giving support," he said.

He added the support level was $12,670, while on the upside the $13,000 mark provided "psychological resistance".

In other metals, zinc CMZN3 fell 0.5% to $3,335 a ton and aluminium CMAL3 shed 0.9% to $3,062.50, after breaking a four-day losing streak on Wednesday. Lead CMPB3 lost 0.4% to $1,955.50, nickel CMNI3 dipped 0.2% to $17,240 and tin CMSN3 slipped 0.6% to $45,425.