LONDON, May 11 (Reuters) - Copper slid on Tuesday on doubts about a $1 trillion emergency rescue plan to stabilise euro zone sovereign debt, and worries over the demand outlook in Europe and in China, the world's largest copper consumer.
Copper for three-month delivery on the London Metal Exchange traded at $6,995 a tonne at 1408 GMT from a close of $7,120 on Monday when the metal used in power and construction rose $180.
Nickel and lead earlier fell more than 5 percent, while zinc and aluminium fell more about 4 percent and copper fell nearly 3 percent.
"There are some concerns that maybe we have solved liquidity problems but there's still a solvency problem - will these countries in Europe be able to implement structural reforms," said Christin Tuxen, analyst at Danske Bank.
She added China was an additional concern: "China has come out with weaker than expected industrial production numbers (and) inflation was higher than expected."
Copper fell to as low as $6,632.75 last week, its weakest since mid February, on concerns that debt problems in Greece could spread to other euro zone countries and as equities skidded.
The euro fell back against the dollar on Tuesday as investors grew cautious over the details of the rescue plan and whether it would solve the region's debt problems in the long term.
A weak euro makes metals costlier for European investors.
"The markets are being a bit cynical and rightly so," Alex Heath, head of base metals London's RBC Capital Markets. "There is an awful lot of hard work and belt-tightening to be done. The markets have factored in a recovery that hasn't been achieved yet."
EYES ON CHINA
In China, output of base metals was strong in April. Copper rose 15 percent versus a year ago to 380,000 tonnes while output of aluminium vaulted 57 percent to 1.37 million tonnes.
But investors are concerned that demand from China could soften as the world's top consumer of base metals looks set to take steps to cool its red-hot growth.
China's consumer inflation rose a little more than expected in the year to 2.8 percent, data showed earlier, while industrial output undershot forecasts.
"There's a great concern that China is slowing down and confidence in metals is going to continue to erode as the (northern hemisphere) summer wears on," Heath said.
Adding to uncertainty, China signalled that it was ready to let the yuan move more freely when it said it would manage the currency "with reference to a basket of currencies", a central bank adviser said on Tuesday.
Aluminium traded at $2,089 a tonne from $2,144. The metal used in transport and packaging earlier hit a low of $2,055.50.
Zinc traded at $2,075 from $2,139 while battery material lead traded at $2,059.50 from $2,108. Lead earlier fell to a session low of $1,990.
Tin traded at $17,500 from $17,750 on Monday and nickel at $22,555 from $23,000. Nickel hit a session low of $21,820 a tonne earlier.
Metal Prices at 1412 GMT Metal Last Change Pct Move End 2009 Ytd Pct
move #VALUE! LME Alum 2085.00 -59.00 -2.75 2230.00 -6.50 LME Cu 6995.00 -125.00 -1.76 7375.00 -5.15 LME Lead 2052.00 10.00 +0.49 2432.00 -15.63 LME Nickel 22505.00 -495.00 -2.15 18525.00 21.48 LME Tin 17375.00 -375.00 -2.11 16950.00 2.51 LME Zinc 2069.00 -70.00 -3.27 2560.00 -19.18 SHFE Alu 15670.00 -50.00 -0.32 17160.00 -8.68 SHFE Cu* 55710.00 -910.00 -1.61 59900.00 -6.99 SHFE Zin 16550.00 -430.00 -2.53 21195.00 -21.92 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
