LONDON, July 8 (Reuters) - Copper prices eased on Wednesday, touching two-week lows as expectations of a poor economic outlook and demand growth prospects dominated sentiment. Benchmark copper on the London Metal Exchange was traded at $4,865 a tonne from Tuesday's last bid at $4,880. Earlier prices of the metal used in power and construction fell to $4,830, the lowest since June 24. Worries about real demand growth were highlighted by May machinery orders data from Japan which reinforced the fragile state of economic activity. [ID:nT292365 "There's still a certain degree of nervousness over how quickly the economy is going to pick up, nervousness amongst consumers about rebuilding inventory," said David Wilson, analyst at Societe Generale. Helping the bulls however, was data that German industrial output bounced back strongly in May. But a seasonal demand lull and fading demand from China, the world's largest consumer of copper, are also behind lack of confidence in the strength of recovery. Stockpiling by the Chinese state and consumers have this year helped to push copper prices up about 60 percent. Also a boost are signs the global economic slowdown may be bottoming. Some LME traders also said China was looking to sell some of its copper stockpile back to the market. "There is a lot of copper in China, sitting outside the reporting system, which is held by foreigners and speculators," said Simon Hunt, chairman at Simon Hunt Strategic Services. Aluminium was last bid at $1,591 a tonne in LME rings from $1,618 on Tuesday. Stocks of aluminium used in the transport and packaging industries fell 2,500 tonnes, but remained close to record levels near 4.4 million tonnes. Steel ingredient nickel was at $15,525 from $15,650 while battery material lead was last bid at $1,635 from $1,656. Zinc fell to $1,542 a tonne from $1,565 and tin was traded at $14,050 versus $14,125. Markets are watching the build up of long tin positions of about 183,000 tonnes, nearly 10 times the level of LME stocks, compared with around 119,000 tonnes on May 1. For story on CFTC and commodities regulation click on Metal Prices at 1226 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 220.00 -1.40 -0.63 139.50 57.71 LME Alum 1581.00 -37.00 -2.29 1535.00 3.00 LME Cu 4844.00 -126.00 -2.54 3060.00 58.30 LME Lead 1631.00 -25.00 -1.51 999.00 63.26 LME Nickel 15410.00 -240.00 -1.53 11700.00 31.71 LME Tin 13875.00 -875.00 -5.93 10700.00 29.67 LME Zinc 1534.00 -31.00 -1.98 1208.00 26.99 SHFE Alu 13435.00 -45.00 -0.33 11540.00 16.42 SHFE Cu* 38990.00 -260.00 -0.66 23840.00 63.55 SHFE Zin 13135.00 -185.00 -1.39 10120.00 29.79 ** 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 Pratima Desai; Editing by James Jukwey)

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