May 21 (Reuters) - Copper prices fell on Tuesday, dragged down by a firmer dollar and as traders took a breather after prices hit a record high in the previous session.

Three-month copper on the London Metal Exchange (LME) eased 0.5% to $10,839.50 per metric ton by 0230 GMT, while the most-traded July copper contract on the Shanghai Futures Exchange (SHFE) edged down 0.1% at 86,650 yuan ($11,965.92) a ton.

The dollar was firmer, making greenback-priced metals more expensive to holders of other currencies.

Investors took a breather after copper had a red-hot rally to hit a record high of $11,104.50 a ton in the previous session. The LME copper contract has gained 27% so far this year.

The rally was triggered by short covering on the U.S. Comex exchange that created momentum for speculators and funds to continue to pour money into the metal, betting on its increasing usage in the global green energy transition.

However, on the physical market, copper demand is not as red hot. The usual premium that Chinese consumers and traders pay to import copper has switched to zero and even below zero since mid-May, the lowest since at least 2012.

Meanwhile, copper stocks in SHFE warehouses have been elevated since February and were at 290,376 tons on Friday, up from 33,130 tons at the beginning of the year.

LME aluminium declined 0.5% to $2,618 a ton, nickel dropped 1.9% to $21,205, zinc was down 0.5% at $3,098, lead shed 0.6% to $2,327 and tin decreased 1.1% to $34,100.

SHFE aluminium fell 0.5% to 20,980 yuan a ton, tin dropped 1.9% to 274,900 yuan while lead rose 0.2% to 18,855 yuan, nickel increased 0.4% to 156,750 yuan, and zinc advanced 1.8% to 24,615 yuan.

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0900 EU Total Trade Balance SA March

($1 = 7.2414 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Mrigank Dhaniwala)