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LONDON, July 29 (Reuters) - Copper eased on Tuesday, with concerns over the strength of global demand and rising inventories weighing on prices. Lead jumped by almost 3 percent to a 10-week high of $2,293.75 a tonne, extending strong gains from Monday, with a further large drop in London Metal Exchange (LME) stocks fuelling buying before profit-taking knocked prices lower. Copper for delivery in three months on the LME was untraded in official rings, but bid at $7,910 a tonne from $7,995 at the close on Monday. LME copper has risen by more than 20 percent this year due to concerns over tight supplies and production cuts, hitting an all time high of $8,940 a tonne at the start of this month. But rising LME stocks of the metal used in power and construction have weighed on sentiment, as has concern that demand from number one consumer China has not been as strong as previously expected. "Copper looks a lot better value at $8,000 a tonne than $8,800 a tonne," said UBS analyst John Reade. "Not too many people will want to be short when global stocks remain low, despite fears of slowing demand." Copper stocks in LME warehouses at around 136,000 tonnes are at historically low levels, despite rising by more than 12 percent since the beginning of May. "Waning confidence from rising LME supply and closed north Chinese heavy industries (for the Olympics) is likely to keep prices from rising far," ANZ said in a note. Traders took note of output cuts at India-focused metals group Vedanta Resources Plc, whose copper cathode output fell 16 percent to 68,000 tonnes in the first-quarter due to a maintenance shut-down.
LEAD LEAPS
Stocks of battery material lead in LME warehouses fell by 1,450 tonnes to 89,275 tonnes, down by more than 11 percent since July 9. Cancelled warrants -- material already reserved for customers -- have been rising sharply over the past week, with reserved stocks comprising more than 6 percent of total inventories. "Lead imports into China and cancelled warrants in the U.S. have been supportive -- there seems to be a lot of investor interest at the moment with rising open interest numbers," UBS\'s Reade said. However, lead prices pared gains after hitting early highs, falling to trade at $2,235 a tonne from $2,230 on Monday. "Lead has fallen back in line with copper and aluminium, with investors choosing to book profits in pretty light trade," one floor trader at the LME said. Zinc traded at $1,875 a tonne from $1,925 at the close on Monday. Nickel eased to $18,450 a tonne from $18,750, with analysts pointing to slowing demand from stainless steel producers. Tin traded at $22,625 a tonne from $22,350 and aluminium was down at $2,988 from $3,017 on Monday. Aluminium used in packaging, transport and power has fallen by more than 10 percent since hitting a record high of $3,380 a tonne on July 10. The sell-off was triggered by falling oil prices, expectations of an oversupplied market and rising stocks. Aluminium stocks are at their highest level since May 2004, with a further build of 850 tonnes on Tuesday taking the total to more than 1.1 million tonnes. "Aluminium supply looks ample," said ANZ. "Prices look vulnerable to a healthy correction." Metal Prices at 1211 GMT Metal Last Change Percent Move End 2007 Ytd Percent
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