Copper prices climbed towards eight-year highs on Tuesday as a lower dollar, expectations of robust demand in top consumer China and falling inventories spurred purchases.

Benchmark copper on the London Metal Exchange traded up 0.8% at $7,922.50 a tonne in official rings. Prices of the metal, used by investors as a gauge of economic health, climbed above $8,000 last month, the highest since February 2013.

"The lower dollar is supporting copper and focus is on the vaccines which imply stronger growth in the medium term," said Quantitative Commodity Research analyst Peter Fertig.

"China's economy is in good shape, it is driving force behind metals demand."

DEMAND: Clues to demand prospects for base metals will come over the next two weeks with the release of Chinese data on total social financing, new loans, trade and industrial production.

DOLLAR: A lower U.S. currency makes dollar-denominated commodities cheaper for holders of other currencies, which could boost demand.

STOCKS: Copper stocks in LME registered warehouses at 105,425 tonnes are down more than 40% since the middle of October and the lowest since September last year.

Cancelled warrants - metal earmarked for delivery - at nearly 30% suggest more copper is due to leave LME warehouses.

TIN: Stocks of tin at 1,870 tonnes have plunged nearly 70% since last October and are at their lowest since May last year. Cancelled warrants stand at nearly 50%.

Worries about tin supplies on the LME market pushed the premium for the cash over the three-month tin contract to more than $220 a tonne at the end of December.

The premium was last at $162 a tonne.

Three-month tin was up 0.4% at $21,125. Earlier in the session it touched $21,360, the highest since April 2019.

LEAD: Cancelled warrants at more than 40% of stocks are behind the narrowing discount for the cash over the three-month lead contracts.

Three-month lead was up 0.4% at $2,059.

OTHER METALS: Aluminium was firmer at $2,032.50, zinc gained 0.7% to $2,811 and nickel added 1% to $17,576 a tonne.