* Peru copper production likely do more than double by 2016 * Lead hits 7-week low as inventories rise * Coming up: U.S. CPI data; 1230 GMT By Silvia Antonioli LONDON, Sept 17 (Reuters) - Copper steadied near a five-week low on Tuesday in cautious trade ahead of a Federal Reserve policy meeting at which the U.S. central bank is widely expected to announce it will begin rolling back its monetary stimulus. Benchmark copper on the London Metal Exchange (LME) was little changed at $7,078 a tonne by 0951 GMT from a close at $7,085 on Monday. It fell to $7,024 a tonne on Friday, its lowest since Aug. 8. Investors were awaiting the two-day meeting starting on Tuesday during which the Federal Reserve will discuss whether to taper its stimulus program which has benefited metals and other assets perceived as riskier. Despite a lacklustre August U.S. jobs report, the Fed's Open Market Committee is expected to trim its monthly asset purchases by about $10 billion from $85 billion. "The dominant factor is the Fed today; not many people want to commit before the Fed meeting and also because physical demand is not there just yet," said analyst Andrey Kryuchenkov at VTB Capital in London. "When you look at the premiums, when you look at physical demand in Europe or even in China, there is nothing to be extremely excited about. So many investors chose to stay away at least until it is clear what the Fed does tomorrow." GROWING SUPPLY Expectations of higher supplies are also dragging on copper, which has fallen by about 11 percent so far this year. Copper production increased by 6.3 percent in the first half in top producer Chile and Peru is likely to more than double its output by the end of 2016 as several large mining projects start production. "I would say that the copper market is well balanced until the year-end and there are significant projects that should keep the market well supplied in the future," Kryuchenkov said. In other metals, benchmark lead fell 0.6 percent to $2,041 per tonne, its seventh consecutive session of losses, weighed down by rising stocks. Earlier the metal hit a session low of $2,037.75, it lowest in seven weeks. Stocks of the metal in LME-registered warehouses have risen by 36 percent from a 3 1/2 year low hit a week ago. Inventories shot up by 49,475 tonnes at LME-registered warehouses in the Dutch port of Vlissingen in one day last week. It was the biggest daily rise in lead stocks since 1970, LME data showed on Friday. Data on Tuesday showed a further increase of 14,875 tonnes which brought stocks of the metal, used to make batteries, to 246,100 tonnes, their highest since early May.

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