METALS-Copper ends down but off lows as equities rally

* Rallying equities lend support to copper * Copper inventories continue to climb * Question marks over Chinese imports (Recasts, adds NEW YORK to dateline, updates with New York closing copper prices, adds analyst comments) By Chris Kelly and Michael Taylor NEW YORK/LONDON, Sept 28 (Reuters) - Copper prices fell but steadied by the close of trading on Monday as a rally in equities helped offset concerns about rising inventories, falling Chinese imports and weak demand in western countries. The stronger tone on Wall Street [.N] helped slow a price correction in the metal going back to last week and triggered a reversal from an early slide to a 5-1/2 week low, analysts said. "The outside markets did lend some support," said Sterling Smith, an analyst for Country Hedging Inc in St. Paul, Minnesota. "The better performance in the stock market did lift copper off the lows." Copper for December delivery HGZ9 on the New York Mercantile Exchange's COMEX division fell 1.35 cents to close at $2.7270 a lb, after dealing in a session range from $2.7435 to $2.6625, its lowest level since Aug. 19. On the London Metal Exchange (LME), copper for three-month delivery MCU3 ended up $19 at $6,009 a tonne. It touched a session trough at $5,855.25, also a low not seen since Aug. 19. Aluminum MAL3 eased to a two-month low of $1,778, while nickel MNI3 fell to a two-week low of $16,400. "The market is waiting for the Chinese to come back ... (but) the Chinese are not going to be back until LME week, so the market is looking to exogenous factors like the dollar and equities," Standard Bank analyst Leon Westgate said. The dollar gave up most of its gains against a basket of currencies, boosting the appeal of dollar-priced metals. [USD/] On Friday, disappointing U.S. durable goods and new homes data weighed on equity markets and prompted investors to switch to sell risky assets like copper in favor of the perceived safety of the dollar. Copper has been trading sideways since mid-August, when worries over falling Chinese imports and rising global inventories took prominence over recovery hopes. "At the moment we're looking at early signs of a correction. We have a rise in London Metal Exchange inventories, lower Chinese copper imports and no discernible pickup in demand anywhere else in the world," said VM Group analyst Carl Firman. Latest U.S. data showed economic activity slipped in August, hurt by weakness in the labor market even as production indicators improved. [ID:nNYS005442] Standard Chartered analyst Dan Smith said comments about easing commodities growth in China from miner Anglo American (AAL.L) were hitting sentiment. [ID:nSYD542361] Prices of copper, used in power and construction, have more than doubled this year due to Chinese stockpiling measures and investors betting on economic recovery. STOCK BUILD WEIGHS LME copper stocks added 3,650 tonnes to 344,350 tonnes, their highest level since mid-May, while aluminum stocks slipped 5,525 tonnes but remained near a record 4.6 million tonnes. For the latest on aluminum stocks, click [ID:nLS248846] "Falling Chinese apparent demand implies that demand in the world ex China will need to improve (an end to de-stocking should be sufficient for copper) or stocks are set to build again on the LME," said Macquarie analysts in a note. Import data from China, the world's top metals consumer, last week showed that refined copper imports fell 25 percent in August. [ID:nHKG189580] Chinese markets are closed between Oct. 1 and Oct. 8 for the National Day and Autumn Festival holidays. On the macro calendar later this week, investors will eye U.S. ISM and nonfarm payrolls data. [MI/DIARY] In other metals, aluminum ended at $1,833 a tonne versus $1,815, and steel-making ingredient nickel MNI3 ended at $16,750 from $16,900. Battery material lead MPB3 ended at $2,207 from $2,185, zinc MZN3 at $1,878 a tonne from $1,880 and tin MSN3 ended flat at $14,400. A dominant position holding more than 90 percent of stock warrants and cash contracts in tin has pushed up the premium for cash material over the three-month future to near five-year highs of about $700 a tonne.