(Updates prices)

By Ashitha Shivaprasad

June 17 (Reuters) - Copper prices fell on Tuesday as the

fifth day of air strikes carried out by Israel and Iran deepened

concerns about Middle East instability and its dampening effect

on global growth and demand for industrial metals.

The firmer dollar, in which metals are priced, reinforced

negative sentiment.

Benchmark copper on the London Metal Exchange (LME)

was down 0.3% at $9,677 a metric ton at 1634 GMT.

Global stocks slid while oil rose as the air war between

Israel and Iran sowed fears of a broader regional conflict.

Higher oil prices dampen economic growth and stoke inflationary

pressures.

"Another war has broken out, unsettling investors, raising

concerns about long-term global growth, and prompting a shift

away from cyclical assets like base metals and a move towards

safe-haven assets," said Panmure Liberum analyst Tom Price.

The U.S. dollar index rose, making dollar-priced

commodities more expensive for buyers holding other currencies.

Meanwhile, Citi said in a note it expected copper prices to

fall to $8,800 in the third quarter if the U.S. imposes tariffs

on copper imports.

President Donald Trump in February ordered a probe into

possible tariffs on copper imports to rebuild U.S. production.

The probe has resulted in a price premium for COMEX copper

futures against LME contracts, which traders and

producers have capitalised on by diverting copper supplies from

other markets to the United States.

U.S. COMEX copper futures traded at $4.7955 lb,

bringing the premium over LME copper to near $900 a ton.

Concerns about copper availability in the LME system due to

falling stocks and large holdings of warrants -

title documents conferring ownership - and cash contracts

pushed up the premium for nearby contracts.

The backwardation or premium for the cash over the

three-month copper contract jumped above $122 a ton, its highest

since October 2022, compared with a discount at end-April.

Elsewhere, traders said three-month aluminium rose

1.5% to $2,552 a ton due to large holdings of warrants and

futures contracts to buy nearing maturity .

In other metals, zinc fell 0.7% to $2,640, nickel

shed 0.4% to $15,015 and tin edged down 0.5% to

$32,450. Lead was down 1.3% at $1,982.