METALS-Copper settles lower as economic doubts remain

* Copper stocks drop, aluminum stocks near record high

* Eyes on China trade data later in the week

* Tin in backwardation (Changes headline, recasts, updates with New York closing copper prices, adds NEW YORK to dateline and analyst comments)

By Chris Kelly and Michael Taylor

NEW YORK/LONDON, July 7 (Reuters) - Copper prices closed lower on Tuesday as concerns over an uncertain economic outlook and its impact on demand dragged values down, outweighing the fleeting positive impact of upbeat German manufacturing data earlier in the day.

Copper for September delivery HGU9 on the New York Mercantile Exchange's COMEX division fell 3.70 cents to settle at $2.2255 a lb.

"It's a bit of hesitation we're seeing today," said Robin Bhar, senior metals analyst at Calyon. "Prices seem to have stalled in both equity and commodity markets ... as this (economic) recovery hasn't come through perhaps as quickly as everyone has wanted.

"There are some doubts as to whether growth is beginning to peter out," he added.

On the London Metal Exchange (LME) copper for three-months delivery MCU3 was last bid on the floor at $4,880 a tonne, versus Monday's close of $4,970. The metal used in power and construction hit a session peak at $5,045.

Boosting economic sentiment earlier in the session was data showing German manufacturing orders rose at their strongest pace in nearly two years. [ID:nL7721816]

But that sentiment turned as global equity markets weakened amid rising prospects of a protracted economic recovery.

"It still looks like the market is having trouble reconciling how strong things will be," said Steve Platt, futures analyst with Archer Financial Services in Chicago. "We are still vulnerable to rising joblessness ... not a conducive factor for the copper market to be going up."

Soaring U.S. unemployment and a shrinking economy drove delinquencies on credit-card debt and home equity loans to all-time highs in the first quarter, the American Bankers Association said. [ID:nN07299679]

Analysts also warned that copper faced pressure as a traditionally quiet trading period begins and as Chinese demand subsides.

"We're going into the quieter summer period and there's a widespread belief that Chinese imports are going to be lower in these couple of months for most of the (industrial) metals," said Stephen Briggs, commodity strategist at RBS Global Banking and Markets.

Stockpiling by China, the world's top copper consumer, has helped copper prices surge about 60 percent so far in 2009. But analysts warn this support is fading and Western economies remain too beleaguered to pick up the baton just yet.