METALS-Copper weakens as Chinese demand softens

* Copper seen weakening until after China holidays

* Copper, aluminium stocks dip

LONDON, Sept 29 - Copper drifted lower on Tuesday as buying waned in China, the world's top consumer of the metal, and as trade quietened ahead of Chinese National Day and Autumn Festival holidays.

Copper for three-months delivery on the London Metal Exchange traded at $5,940 a tonne from a close of $6,009 on Monday.

"The general feeling out there is we could see a bit more selling before we go into the Chinese holiday," said Gayle Berry, and analyst at Barclays Capital in London.

The week-long holidays start on Oct. 1.

Chinese demand has helped the metal used in power and construction surge about 90 percent so far this year, but investors fear this support is starting to subside and that OECD demand may not recover in time to pick up the slack.

Berry added investors could take some comfort from glimmers of recovery in the physical markets.

"The physical markets are certainly starting to throw out some more positive signals, but it doesn't seem to be enough to convince markets OECD demand is recovering."

Copper is on track for a fall of nearly 9 percent in September, its first monthly decline since December 2008.

This year's surge in prices follows a decline of 50 percent in 2008.

"Copper's storming start to the third quarter appears to have run out of steam," Standard Bank said in a note.

"With the Chinese having stepped back from the market for the time being, and with activity yet to pick up after the summer -- fears of another weak fourth quarter are beginning to resurface."

The note added that momentum was unlikely to pick up until after the Chinese national holidays.

WEAK FOURTH QUARTERS

Over the past three years copper prices have registered their worst performances during the fourth quarters. They halved in value in the last three months of last year as global economic turmoil crushed industrial metals demand.

Stoking concerns about waning Chinese demand, stocks of copper are trending higher. In mid-July inventories started to reverse this year's trend of nearly constant falls. Inventories dipped 125 tonnes to 344,225 tonnes, but stand at their highest level since mid-May.

Among other industrial metals, aluminium was at $1,818 from $1,833. Inventories of the metal used in transport and packaging fell 3,850 tonnes but are within touching distance of a record high around 4.6 million tonnes.

Zinc was at $1,874 from $1,878 and lead stood at $2,185 from $2,207. Tin was unchanged at $14,400, while nickel was at $16,765 from $16,750. Metal Prices at 0936 GMT Metal Last Change Percent Move End 2008 Ytd Percent

move COMEX Cu 269.10 -2.40 -0.88 139.50 92.90 LME Alum 1812.00 -21.00 -1.15 1535.00 18.05 LME Cu 5930.00 -79.00 -1.31 3060.00 93.79 LME Lead 2180.00 -27.00 -1.22 999.00 118.22 LME Nickel 16715.00 -35.00 -0.21 11700.00 42.86 LME Tin 14325.00 -75.00 -0.52 10700.00 33.88 LME Zinc 1868.00 -10.00 -0.53 1208.00 54.64 SHFE Alu 14705.00 175.00 +1.20 11540.00 27.43 SHFE Cu* 46470.00 580.00 +1.26 23840.00 94.92 SHFE Zin 15090.00 295.00 +1.99 10120.00 49.11 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07