May 30 (Bloomberg) -- Copper snapped two days of gains in London on speculation Chinese government efforts to damp the nation's booming stock market will slow economic growth and demand for industrial metals. Lead rose to a record.

Chinese shares tumbled the most in three months after the government tripled the tax on securities transactions to cool a rally that has doubled the value of local stocks this year to $2.47 trillion. The Chinese economy grew 11.1 percent in the first three months of the year.

``This adds to the monetary tightening and export tax measures, which will eventually have an effect on economic growth,'' David Thurtell, a London-based analyst at BNP Paribas, said in an interview. ``Until their economy becomes more open it's a bit like putting your finger in the dyke.''

Copper for delivery in three months fell $20, or 0.3 percent, to $7,245 a metric ton as of 5:40 p.m. on the London Metal Exchange. The contract has fallen 13 percent since trading at an 11-month high of $8,335 a ton on May 4.

China, the world's largest consumer of metals including copper, aluminum and nickel, said May 22 it will raise export taxes from June 1. The country will charge higher export taxes on 142 products, including lead and zinc, to pare a record trade surplus that's threatening to hurt relations with the U.S.

Rising imports into China this year have depleted LME- tracked inventories of the metal. Chinese imports of refined copper and alloys more than doubled in the first four months of 2007 from a year earlier.

Inventories monitored by the LME fell for an eighth consecutive day, dropping 1.3 percent to 130,250 tons, the exchange said today in a daily report.

Chile Production

Copper output in Chile, the world's biggest supplier, rose 3.2 percent to 459,017 metric tons in April, slower than in March, the government's National Statistics Institute said yesterday. In March, production surged 13 percent from a year earlier to 502,106 tons.

Lead climbed $50.15 to a record $2,290.15 a ton on the LME, beating yesterday's all-time high by $40.15. Lead was in a deficit of 38,000 tons in the first three months as consumption rose 4.7 percent to 2.05 million tons, the International Lead and Zinc Study Group said May 24. Supply of the metal, used in batteries, may be lower this year due to the increase in Chinese export taxes, Standard Bank said in a May 21 report.

Nickel Falls

Nickel dropped $1,000, or 2.1 percent, to $46,650 a ton. LME-monitored inventories of the metal used in stainless steel fell today by 0.3 percent to 7,698 tons, the exchange said. Before today, stockpiles had risen for six consecutive days, a 61 percent increase.

Demand for nickel in China may rise 62 percent to 400,000 metric tons in 2010, from 247,000 tons in last year, because of increased demand from stainless steelmakers, Zhang Mei, a researcher at the Ministry of Land and Resources' information center, said today at a conference in Shanghai.

Nickel will fall to $40,000 a ton in the next month if stockpiles continue to rise, UBS metals analyst John Reade said May 23.

``Demand is softening, we believe, due to high prices,'' Reade said today in a report, reiterating his forecast.

Among other LME-traded metals, aluminum fell $9 to $2,763 a ton and zinc slipped $65 to $3,585. Tin advanced $225, or 1.6 percent, to $14,100 a ton.

To contact the reporter on this story: Brett Foley in London at bfoley8@bloomberg.net

Last Updated: May 30, 2007 13:05 EDT