METALS-Copper slips to more than two-month low on high stocks and weak demand

(Recasts with updated prices at 1605 GMT) By Eric Onstad LONDON, June 27 (Reuters) - Copper prices hit their weakest in more than two months on Thursday as more bullish positions were scrapped, inventories kept rising and demand remained lacklustre in top metals consumer China. Three-month copper CMCU3 on the London Metal Exchange was down 0.4% at $9,506.50 a metric ton by 1605 GMT after hitting an intra-day low of $9,485.50, its weakest since April 17. Earlier the metal, mainly used in the power and construction industries, got a temporary boost from a weaker dollar index =USD after U.S. weekly jobless claims data were released, making commodities priced in the U.S. currency less expensive for buyers using other currencies. Meanwhile, copper stocks registered with the world's big three exchanges have risen above 500,000 tons for the first time since August 2021. LME inventories MCUSTX-TOTAL have surged by 72% since mid-May to 177,750 tons, the highest in more than six months. "The rise in total exchange copper stocks to over 500,000 tons is not something the market likes when it's already under pressure from long liquidation," said Ole Hansen, head of commodity strategy at Saxo Bank. "The question is how deep can this correction go. The area just below $9,500 is an important technical level and if we continue lower from there, then we're potentially looking at $9,100 next," he added. After rallying to a record high of $11,104.50 on May 20, copper prices have fallen 14%, partly on sluggish economic data from China. Adding to worries about weak physical copper demand in the country was data on Thursday showing China's industrial profit growth slowed sharply last month. Low local premiums and rising inventories in China argue against fundamental copper market tightness, TD Securities analysts said in a note. "While the fundamental situation certainly looks promising in the years to come, the lack of evidence supporting current physical tightness has started to see the money manager positioning unwind," TD Securities said. In other metals, LME aluminium CMAL3 eased 0.8% to $2,492.50, zinc CMZN3 shed 0.5% to $2,925 and lead CMPB3 dropped 0.6% to $2,181. Nickel CMNI3 edged up 0.1% to $17,075 and tin CMSN3 gained 0.7% to $32,225. (Reporting by Eric Onstad; Additional reporting by Ashitha Shivaprasad in Bengaluru and Polina Devitt in London; Editing by David Goodman, Emelia Sithole-Matarise and Chris Reese) (([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 ))