By Julie Crust LONDON, Oct 9 (Reuters) - Copper was steady on Thursday as concerns about softer demand were partly offset by a slightly weaker dollar and a rebound in equities markets. "Relative to recent weeks, there is an air of greater stability around, however temporary," said Steve Hardcastle, analyst at brokerage house Sucden. Three-month copper MCU3 on the London Metal Exchange was at $5,340 a tonne in official trading, after earlier falling to $5,220, near a 2-1/2-year low. The metal, used in the power and construction industries, closed at $5,240 on Wednesday. Copper prices have slumped about 40 percent from a record high of $8,940 a tonne reached on July 2. "Metals prices look likely to fall further as expectations for demand fall away," Fairfax said in a research report. "Metals prices are taking their lead from equity markets in the current environment as an indicator for lower consumption and lower funding of industrial growth." European stocks rose by midday on Thursday, breaking a three-day losing streak, after fresh moves by governments and central banks to ease the financial crisis. [.EU] "Although all attention is firmly focused on the credit crunch, rate cuts and the financial market bail outs, the deterioration of the real economy has not escaped traders of industrial commodities," UBS said in a note. "A worsening outlook for demand for metals and energy has prompted a sell-off in all commodities that are sensitive to global economic growth." The market is also awaiting further details on the Shanghai Futures Exchange's move to compulsorily close positions on 10 copper futures contracts. [ID:nSHA99356] Aluminium MAL3 was at $2,298 a tonne from $2,250. FURTHER OUTPUT CUTS SEEN Zinc, lead, tin and nickel were all supported by expectations that prices near or below the marginal costs of production will likely force more output cuts from loss-making mining companies. Lead and zinc prices were also boosted by a Chinese local government decision to close smelters, in a move expected to cut China's lead and zinc output by 20 percent in the fourth quarter, after an accidental discharge of arsenic in southwestern China, a local newpaper reported. [ID:nSHA67040] China is the world's biggest producer of zinc and lead. Lead MPB3 was last quoted at $1,610/1,615 from $1,575, while zinc MZN3 was quoted at $1,485.0/1,485.5 a tonne from $1,430. Nickel MNI3 was last quoted at $13,060/13,070, down from $13,200 a tonne. The metal earlier fell to $12,625, its lowest level since December 2005, on concerns about demand from stainless steel producers. Tin MSN3, seen as the metal with the strongest fundamentals, was unchanged at $14,900 a tonne. Metal Prices at 1214 GMT Metal Last Change Pct Move End 2007 Ytd Pct move LME Cu 5330.00 90.00 +1.72 6670.00 -20.09 SHFE Cu* 0.00 -45720.00 -100.00 56880.00 -100.00 LME Alum 2289.00 39.00 +1.73 2403.00 -4.74 SHFE Alu* 14165.00 -65.00 -0.46 18180.00 -22.08 COMEX Cu** 236.65 0.00 +0.00 303.05 -21.91 LME Zinc 1488.00 58.00 +4.06 2370.00 -37.22 SHFE Zinc* 12285.00 -445.00 -3.50 18950.00 -35.17 LME Nick 13000.00 -200.00 -1.52 26350.00 -50.66 LME Lead 1610.00 35.00 +2.22 2550.00 -36.86 LME Tin 14900.00 0.00 +0.00 16400.00 -9.15 ** 1st contract month for COMEX copper * 3rd contact month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Julie Crust; editing by Peter Blackburn)

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