* China July services growth slows to lowest in almost 9 yrs
* Zinc, lead, aluminium eyed on supply shortfall
* Coming up: U.S. durable goods orders for June at 1400 GMT (Updates with official prices)
By Harpreet Bhal
LONDON, Aug 5 Copper prices slipped on Tuesday, under pressure from data showing growth in China's services sector slowed to its lowest level in nearly nine years, raising concerns about the demand outlook from the world's top metals consumer.
Three-month copper <CMCU3 on the London Metal Exchange (LME) traded at $7,103 in official rings, down 0.4 percent.
The metal, used in power cables and construction, is down more than 3 percent in the year to date, weighed down by expectations of rising supplies this year and lacklustre demand.
Some analysts see the dips as an opportunity to buy, given a brightening outlook for the U.S. economy and some encouraging signs in China.
China will increase investment in areas including the property sector, a major copper consumer, while authorities will advance wide-ranging economic reforms such as changing the fiscal and pricing systems, the country's economic planning agency said.
"In a long term, I am still bullish on copper. It is mad not to consider buying into the dips, when growth fundamentals are improving," said Naeem Aslam, chief market analyst at Ava Trade.
Keeping falls in check were prospects that the United States may hold off raising interest rates, a view that encouraged investors to buy metals.
A majority of Wall Street's top bond firms see no move by the Federal Reserve to raise interest rates before the second half of next year.
"As long as the U.S. economy can absorb any increase in the interest rate with no major impact on consumer spending, we think manufacturing and construction could pick up further and this could give another big push for copper," Aslam said.
Some analysts expect that metals facing a supply shortfall, such as zinc, lead and aluminium, could gain favour as investors focus on the impending closure of zinc and lead mines, capacity cuts, a bottleneck in aluminium exchange stocks and weak prices.
"Demand is okay and improving, which means the metals that are going to do better are the ones with the more compelling supply side stories," said analyst Joel Crane of Morgan Stanley in Melbourne.
Crane said Morgan Stanley was more positive on zinc, which it expects to average at $2,205 in the fourth quarter.
"Lead is just as exposed to the mine outages as zinc, but it has a very different supply side story. The big difference is that lead gets a great deal of supply from recycling."
Three-month LME zinc, untraded in official rings, was bid at $2,384 a tonne, down 0.4 percent, after gaining 2.4 percent in the previous session. Prices hit a high since August 2011 at $2,416 a tonne on July 28.
A narrowing differential between cash and three month aluminium prices CMAL0-3 has put pressure on financing deals, many of which have now become unprofitable and may be unwound, Macquarie said.
In such a deal, a trader will buy aluminium, strike a deal to store it cheaply, at the same time selling it forward, and profit from the price differential.
The differential between cash and three month aluminium prices reached the slimmest since December 2012 at the end of July at $9.50, compared to more than $40 for most of 2013.
"For those with a portfolio of financing deals we would expect pressure to release some of this material back to the market. In theory, this should also create downward pressure on regional premiums over the coming weeks," it said.
Most of the LME's near 5 million tonnes of aluminium is thought to be financed in this fashion, with a similar volume of metal estimated to be kept outside exchange warehouses.
Aluminium traded at $2,013 in official rings, down 0.8 percent.
Other metals were untraded in official rings, with lead bid at $2,255, down 1 percent, tin bid at $22,350, down 0.2 percent and nickel bid at $18,550, up 0.3 percent.
The LME released its first report on long and short positioning for copper, aluminium and other metals, in a move aimed at boosting transparency in the world's biggest marketplace for industrial metals.
Peru approved an environmental study for Southern Copper Corp's $1.4 billion Tia Maria project, clearing the last major hurdle to construction, Deputy Mines Minister Guillermo Shinno said on Monday.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
(Editing by William Hardy)