Copper down 1.7 pct, LME stocks weigh on aluminium

London Metal Exchange copper drifted lower on Tuesday with a close eye on global equity markets and aluminium was under pressure after two successive days of inventories rising, analysts said. "Metals are a bit under pressure, LME stocks are not helpful," analyst Stephen Briggs at Societe Generale Corporate and Investment Banking said. Copper for delivery in three months shed $125 or 1.7 percent to $7,260 by midsession. Aluminium fell $11 to $2,464, after dropping $69 on Monday. LME stocks of aluminium jumped 12,900 tonnes on Monday and rose another 7,200 to 846,825 on Tuesday, their highest level since August 2004. "However, restrictions of China on aluminium exports and a pick up of demand after the summer season might limit the downside for aluminium prices," a Dresdner Kleinwort report said. Metal prices were seen remaining hostage to movements in other markets as long as credit squeeze worries persisted. However, any dips were likely to be well supported ahead of fourth quarter seasonal strength in demand, analysts said. Copper miner Kazakhmys posted a 22 percent rise in half-year core profit on Tuesday. "The outlook for pricing and demand remains firm," chairman Vladimir Kim said in a statement.[ID:nL04572041] Shares in Kazakhmys , rose 1.3 percent on the 100 FTSE index with Britain's leading shares falling 0.14 percent. "Overall the market remains in consolidation mode after the gains seen at the end of last week and this is likely to remain the case until the U.S. markets provide leadership again," analyst William Adams at BaseMetals.com said in a report. U.S. markets were closed for Labor Day on Monday. This week's flow of economic data was important to understand the prospects for demand in light of the impact on the real economy from the recent turmoil financial markets. Economic data due this week includes the Institute for Supply Management's manufacturing activity in August on Tuesday, the Federal Reserve's beige book summary of the economy's performance on Wednesday, the European Central Bank's interest rate decision on Thursday and the monthly non-farm payrolls report on Friday. Zinc for delivery in three months fell to $2,940 from $3,035/3,040 and lead was at $2,950/2,955, down $70. "There is some nervousness in the market that the trend of falling lead stocks is coming to an end," Briggs said. In early trade prices dropped 3 percent to an intraday low of $2,920 as traders expected a big inflow of LME stocks. Lead prices, a metal mainly used in batteries, have gained over 75 percent this year on strong demand and tight stocks. LME inventories came in 100 tonnes higher totalling 25,300, down by over 360 percent, from its recent peak in mid-2006 at around 120,000. Stocks are at the lowest level since March 1990. Nickel eased 3.8 percent to $28,650 from $29,750/29,850 and tin shed $550 to $14,750/14,800. Exports of tin from the Bangka-Belitung islands in Indonesia jumped nearly eightfold in August to 17,810.94 tonnes from July, trade ministry data showed on Tuesday.