(Updates official prices)

By Michael Taylor

LONDON, Aug 18 (Reuters) - Copper was little changed on
Wednesday, having hit a one-week high earlier in the day, as
inventory declines offset concerns about slowing demand in top
metals consumer China.

Benchmark copper for three month delivery on the London
Metal Exchange was untraded in official rings but last bid at
$7,374 a tonne, down from $7,382 at the close on Tuesday. London
copper, used in power and construction, earlier touched a one
week high at $7,409.

"Flat as a pancake (but) fantastic prices," said Max Layton,
associate director at Macquarie. "Copper is at double the cost
of production. Inventories falls are going to keep happening,
and people are going to continue to be surprised."

A growing trend of declines in LME inventories has boosted
overall sentiment in recent weeks. Latest LME data showed that
copper stocks fell 1,725 tonnes on Tuesday to 403,300 tonnes,
having fallen from 6-1/2 year highs at 555,075 tonnes in
mid-February.

A recent rise in cancelled warrants -- material earmarked
for delivery -- also buoyed sentiment. On Tuesday, copper
cancelled warrants were at 30,950 tonnes or 7.7 percent of total
stocks, up from 14,875 tonnes in mid-April.

But the relative strength of LME copper, which is flat on
the year, versus Shanghai, which is 3 percent down, has
effectively locked out nearby arbitrage plays.

"The Chinese price has been the driver through 2009 and
first half of this year, but it has also been through periods of
pullback," Layton said.

"The thing holding the LME price from going the next leg
higher, is that right now, the China price ... is not giving it
any further impetus to take the next leg higher," he added.

China's key stock index ended down, while European stocks
sagged in early trade. Equity markets are often seen as a key
economic indicator.

"Stocks fell today for the first time in four days as
investors speculated that recent rises had been excessive given
the renewed prospects of a slowing economic recovery,"
investment bank Fairfax said about China in a research note.

"The economy is widely expected to cool further as a result
of the government's continued commitment to curbing excessive
growth in the property market and unnecessary bank lending."

ALUMINIUM FOCUS

Bucking the inventory trend, aluminium stocks rose 20,975
tonnes on Tuesday, with the focus turning to premiums for nearby
delivery due to tight supplies and dominant holdings of warrants
in LME warehouses and cash contracts.

Aluminium prices edged lower to trade at $2,134 in LME rings
versus $2,141. LME stocks for the metal, used in transport and
packaging, have climbed 91,800 tonnes so far this week to 4.47
million tonnes.

Although LME stocks stand at near record levels, much is
tied up in financing deals making for tight supplies of metal,
dragging the market into a backwardation.

There was a premium of almost $7 a tonne for material for
delivery on Thursday compared with material for delivery on
Friday -- known as tom/next.

Nearly 34,000 lots, or about 850,000 tonnes, of aluminium
changed hands in tom/next trade on Tuesday.

A physically backed aluminium exchange-traded product (ETP)
planned by Glencore International and Credit Suisse is likely to
be launched on a Swiss exchange, a source familiar with the
matter said.

"A lot of things going on," said Macquarie on aluminium.
"The important thing is that financing is still cheap, physical
premiums are still being subsidised by warehouses.

"The market isn't tight ... there is a huge excess of stock
above ground."

Tin was untraded in exchange rings, but last bid at $21,300
versus $21,350, while the premium for cash metal hovered around
$140 to the three-month forward contract.

Used in electrical solder, tin touched $21,650 on Tuesday,
its highest level since August 2008.

Rains in top tin exporter Indonesia may cut output in South
East Asia's biggest economy.

Among other metals, steel making ingredient nickel was
untraded in LME rings but bid unchanged at $21,950, while
battery material lead was traded at $2,137 from a final bid at
$2,130 on Tuesday.

Zinc traded at $2,132 a tonne from $2,123.

Metal Prices at 1214 GMT

Comex copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Percent Move End 2009
Ytd Percent

move
COMEX Cu 333.65 -0.20 -0.06 334.65 -0.30
LME Alum 2124.00 -17.00 -0.79 2230.00 -4.75
LME Cu 7378.00 -4.00 -0.05 7375.00 0.04
LME Lead 2136.00 41.00 +1.96 2432.00 -12.17
LME Nickel 21900.00 -50.00 -0.23 18525.00 18.22
LME Tin 21125.00 -225.00 -1.05 16950.00 24.63
LME Zinc 2134.00 11.00 +0.52 2560.00 -16.64
SHFE Alu 15500.00 -30.00 -0.19 17160.00 -9.67
SHFE Cu* 58040.00 290.00 +0.50 59900.00 -3.11
SHFE Zin 17440.00 95.00 +0.55 21195.00 -17.72
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07

(Reporting by Michael Taylor; editing by xxxxxx)