METALS-Copper slips on demand worries, lead drops as inventories jump

(Updates prices at 1715 GMT) By Eric Onstad LONDON, March 20 (Reuters) - Copper prices retreated further from an 11-month peak on Wednesday on worries about demand in top metals consumer China while lead slumped after a sharp rise in inventories. Three month copper on the London Metal Exchange (LME) CMCU3 dropped 0.5% to $8,931 a metric ton by 1715 GMT after falling by 1.2% in the previous session. U.S. Comex copper futures HGcv1 fell 0.6% to $4.05 a lb. LME copper prices spiked to a peak of $9,025.50 a ton on Monday, the highest since April last year, after a rare agreement by China's copper smelters last week to cut output. But investors are worried about China's troubled and debt-laden property sector, which is usually a key consumer of industrial metals. "There's not much real demand and they haven't really addressed the property sector yet, so that's weighing on the market," Robert Montefusco at broker Sucden Financial said. Also dampening the market was a stronger dollar index =USD ahead of a Federal Reserve meeting that investors expect could send hawkish signals about the timing and extent of any future interest rate cuts. FRX/ A firmer dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies. Lead CMPB3 dropped 1.3% to $2,065.50 a ton after LME inventories soared by 67,350 tons or 34% to the highest since March 2013, highlighting excess supply in the market. Macquarie expects a surplus in the global lead market of 76,000 tons this year and 138,000 tons in 2025. Montefusco said investors were buying options with a strike price of $2,000, hoping to benefit from further losses. In Shanghai, nickel and tin prices declined as investors eyed more mining output from main producer Indonesia after the country said it will accelerate its approval process. A senior Indonesian mining ministry official said the country had issued production quotas of 152.62 million tons of nickel ore and 44,481.63 tons of tin so far this year, and was working to accelerate the approval process. The delayed issuance had sparked fears of supply tightness, supporting prices over the past few months. On the LME, nickel CMNI3 gained 1% to $17,560, aluminium CMAL3 added 0.3% to $2,275.50, zinc CMZN rose 0.2% to $2,510 and tin CMPB3 shed 0.6% to $27,275. For the top stories in metals, click TOP/MTL (Reporting by Eric Onstad; Additional reporting by Siyi Liu in Beijing; Editing by Louise Heavens, Kirsten Donovan) (([email protected]; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: [email protected])) ((For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))