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METALS-LME copper prices drift on steady dollar, China holiday

MELBOURNE, Feb 20 (Reuters) - London copper drifted lower on Tuesday as a firm dollar dictated direction in a thinly traded market, with holidays in top metals user China.

FUNDAMENTALS

* COPPER: London Metal Exchange copper eased for a second day, dropping 0.3 percent to $7,096.50 a tonne by 0240 GMT, having touched its highest in a month on Friday at $7,253.

* OTHER METALS: Other metals were largely unchanged in extremely light trading volumes of less than 1,000 lots.

* SHFE: The Shanghai Futures Exchange is closed for the Lunar New Year, reopening on Thursday, Feb. 22.

* U.S. DOLLAR: The dollar steadied after pulling ahead from a three-year low against a currency basket the previous day, though it was dogged by growing concerns a ballooning fiscal deficit in the United States could disrupt the economy.

* ZINC: Vedanta may accelerate expansion of its African zinc operations to take advantage of prices that have reached their highest levels in a decade because of a shortfall following years of under-investment, its international zinc head said. Vedanta is already bringing on new production at Gamsberg in the Northern Cape region of South Africa, where output should start around the middle of this year, ramping up to full production of 250,000 tonnes annually in around a year's time.

* LME ZINC: LME zinc last week struck $3,595.50, the highest since July 2007, after a lack of mining investment in the last downturn crimped supply.

* RUSAL: Russian businessman Mikhail Prokhorov has agreed to sell a 6 percent stake in Russian aluminum giant Rusal to a consortium of investors led by billionaire Viktor Vekselberg and his partners, the consortium said on Monday.

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MARKETS NEWS

* Asian stocks slipped on Tuesday, their recent recovery stalling after European equities broke a winning streak, while the dollar edged up to pull further away from three-year lows.

DATA/EVENTS (GMT)

0700 Germany Producer Prices Jan 1000 Germany ZEW Economic Sentiment Feb

PRICES

BASE METALS PRICES 0226 GMT Three month LME copper 7090 Most active ShFE copper 0 Three month LME aluminum 2204.5 Most active ShFE aluminum 0 Three month LME zinc 3552 Most active ShFE zinc 0 Three month LME lead 2581 Most active ShFE lead 0 Three month LME nickel 13620 Most active ShFE nickel 0 Three month LME tin 21495

(Reporting by Melanie Burton Editing by Joseph Radford)