* Investors suspect Fed may hint at stimulus withdrawal
* LME aluminium stocks hit new record for second day running
By Maytaal Angel and Harpreet Bhal
LONDON, June 18 Copper fell to a 1-1/2 month low
on Tuesday as investors waited for clarification from Federal
Reserve Chairman Ben Bernanke on the central bank's plans for
its monetary stimulus programme when a two-day policy meeting
ends on Wednesday.
Also weighing on the metal was news that China's home price
rises slowed for a second straight month in May from the
previous month, in a sign that Beijing's attempts to bring
stability to a frothy property market are having some
China is the world's top consumer of copper, which is used
extensively in building.
Benchmark three-month copper on the London Metal Exchange
ended at $7,005 a tonne, down from a close of $7,082 on
Monday. It earlier fell to its lowest since early May at $6,965
The Fed's bond-buying programme has underpinned global
markets broadly but recent comments by Bernanke that he might
slow the $85 billion monthly bond purchases if the U.S. economy
improves has unnerved investors.
"Expectations the Fed might discuss early tapering of
quantitative easing are putting downward pressure on prices, but
fundamentally the market is directionless, demand is not growing
strongly and supply is picking up," said Citi analyst David
Elsewhere, news that Indonesia's government may decide this
week on whether to allow Freeport McMoRan Copper and Gold Inc
to resume open-pit mining at Grasberg, also dragged on
Grasberg is the world's second largest copper mine. It has
been shut since May 15, a day after a training area in a tunnel
caved in, killing 28 workers.
That disruption, plus others in India and the United States,
had been helping underpin copper. They include a landslide
earlier this year hit output at Rio Tinto Ltd's
Bingham Canyon mine in Utah.
"Supply losses so far, including Grasberg and Bingham
Canyon, are still below recent trends," Wilson said.
Daily LME stocks data showed the copper market is well
supplied, with stocks currently up 2,675 tonnes at 632,150
tonnes, their highest level in a decade.
In other metals, three-month aluminium ended at
$1,841 from $1,844.50 on Monday, having hit a low of $1,832 a
tonne earlier, near its weakest point since mid-May.
The aluminium sector, burdened by overproduction, was jolted
after data showed an inflow of 68,725 tonnes of stocks into warehouses, which sent the total to a new
record of 5.348 million tonnes.
"More (aluminium) stocks are heading into the LME, perhaps
the last hurrah before the Fed starts to nudge rates higher,"
said Ed Meir, analyst at INTL FCStone.
Zinc closed unchanged at $1,858, tin closed
at $20,075 from $20,400, nickel ended at $14,150 from
$14,290 while lead was last bid at $2,090 from $2,108.50