Aluminium fell on Tuesday on demand concerns as inventories continued to soar, while the weaker dollar offered little support. Aluminium stocks in London Metal Exchange warehouses jumped 49,000 tonnes to above 2.3 million tonnes and have soared more than 475,000 tonnes this month alone. "The focus is still on rising stocks and poor demand across the sector," said Stephen Briggs, commodity strategist at RBS Global Banking & Markets. "Most people think aluminium stocks are going to continue to rise for a few weeks yet." Aluminium for three-month delivery on the LME fell 1.4 percent to a low of $1,490 a tonne. The metal, used in transportation and power, was trading at $1,495 a tonne at 1108 GMT from $1,511 at the close on Monday. The dollar slipped further, making base metals cheaper for holders of other currencies, but offered little support. Three-month copper, which has dropped almost 60 percent this year, was steady in thin trading. At 1108 GMT it was down at $2,886 a tonne from $2,905. "The outlook on the copper prices is bleak as fundamentals are weak," said analyst Zoe Wang at China International Futures. Copper inventories rose 650 tonnes to 337,350, the highest level since February 2004. Traders will look toward the U.S. Conference Board's consumer confidence report at 1500 GMT for a sign of whether there is possible light at the end of the recession. SOARING INVENTORIES Aluminium inventories have surged to the highest level since September 1994. Rising stocks have capped a rally that aluminium was trying to stage last week following figures from the International Aluminium Institute that showed production cutbacks were starting to have an impact, said Briggs. He said the industrial metal that was showing the most signs of stability and of possibly bottoming out was zinc. "There have been a lot of cutbacks in recent months," he said. "Historically the zinc industry is pretty slow to respond to downturns and this time it's been a bit different and we have had a lot of cutbacks." Zinc prices, which peaked at $4,580 a tonne in November 2006, were trading at $1,130 a tonne compared with the last bid of $1,158 on Monday. Lead dipped to $913 from $920, nickel rose to $9,875 from $9,700, while tin was at $9,800 compared with the last bid of $9,750 a tonne. Metal Prices at 1111 GMT Metal Last Change Percent Move End 2007 Ytd Percent move LME Cu 2875.00 -30.00 -1.03 6670.00 -56.90 SHFE Cu* 22930.00 20.00 +0.09 56880.00 -59.69 LME Alum 1500.00 -11.00 -0.73 2403.00 -37.58 SHFE Alu* 11270.00 10.00 +0.09 18180.00 -38.01 COMEX Cu** 129.70 0.00 +0.00 303.05 -57.20 LME Zinc 1125.00 -33.00 -2.85 2370.00 -52.53 SHFE Zinc* 9705.00 -70.00 -0.72 18950.00 -48.79 LME Nick 9800.00 100.00 +1.03 26350.00 -62.81 LME Lead 895.00 -25.00 -2.72 2550.00 -64.90 LME Tin 9750.00 -150.00 -1.52 16400.00 -40.55 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Additional reporting by Alfred Cang in Shanghai; editing by Anthony Barker)

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