METALS-LME copper dips on firmer US dollar, thin Asia trade

Feb 17 (Reuters) - Copper softened in thin Asia trade on Tuesday as a firmer dollar, coupled with increasing inventories and weak demand, pressured prices.

Benchmark copper CMCU3 on the LME dropped 0.5% to $12,782.50 a metric ton at 0328 GMT.

China's Lunar New Year holiday this week means low volumes and possibly volatile moves due to settlement or rollover of maturing contracts on the London Metal Exchange on Wednesday, traders said.

The dollar held onto gains on the day as markets looked ahead to Wednesday's release of minutes from the January meeting of the Federal Reserve's for clues into the potential timing of rate cuts. USD/

A stronger U.S. dollar makes greenback-priced metals more expensive for holders of other currencies, which could potentially subdue demand and undermine prices.

Copper stocks in LME approved warehouses increased by 7,975 tons to 211,850 tons on Monday MCUSTX-TOTAL, the highest since April 2025.

Stocks for the metal on the world's three biggest metal exchanges have also exceeded 1 million metric tons for the first time in more than two decades, as an inventory build-up due to soft China demand added to recent stockpiling in the U.S.

Meanwhile, the world's top copper producer BHP Group BHP.AX reported a stronger-than-expected half-year underlying profit driven by copper, which, for the first time, surpassed iron ore in the top global miner's earnings, as prices for the metal surged on AI-fuelled demand.

In other metals, zinc prices fell 0.6% to $3,269.0 a ton CMZN3, its lowest in more than a week.

Aluminium CMAL3 eased 0.3% to $3,041.0, extending losses to a fourth straight session. Lead CMPB3 eased 0.1% to $1,956, tin CMSN3 rose 1.5% to $45,225 and nickel CMNI3 was steady at $17,100 a ton.

Tuesday, February 17

DATA/EVENTS (GMT)

0430 Japan Tertiary Ind Act NSA Dec

0700 Germany HCIP Final YY Jan

0700 UK Claimant Count Unem Chng Jan

0700 UK ILO Unemployment Rate Jan

0700 UK HMRC Payrolls Change Jan

1800 Germany ZEW Economic Sentiment, Current Conditions Feb