March 11 (Bloomberg) -- Copper in Shanghai fell for a third day as high prices deterred buying in China, the world's largest user of the metal, amid high levels of domestic inventories.

Stockpiles in Shanghai warehouses are at their highest in almost four months, adding 3,955 metric tons to 52,840 tons, according to an exchange report on March 7. The metal in London rose to a record $8,820 a ton on March 6.

``I don't think the Chinese have much of an interest in buying copper over $8,000 a ton,'' David Thurtell, a metals analyst with BNP Paribas SA in London, said in a Bloomberg television interview. ``Copper above $8,000 is overpriced.''

Copper for May delivery in Shanghai, the most-active contract, fell as much as 1,160 yuan, or 1.7 percent, to 67,210 yuan ($9,455) a ton, the lowest in two weeks. The contract stood at 67,640 yuan a ton as of 2:02 p.m. in Shanghai.

The metal for immediate delivery in Changjiang, Shanghai's biggest cash market, lost as much as 0.6 percent to 67,100 yuan a ton today.

Copper for delivery in three months on the London Metal Exchange fell the most in seven weeks yesterday and traded up 0.5 percent at $8,349 a ton at the same time.

Stockpiles are likely to stay high as the country's imports remained strong. China's imports of copper and copper products were 468,726 tons in January and February, little changed from a year ago, according to data from the customs office yesterday.

Imports were driven by the ``favorable Shanghai-LME price ratio'' at the start of 2008, and may begin to show a slowdown in April, Na Liu, director of Institutional Equity at Scotia Capital Inc., wrote in a weekly report yesterday.

Traders in China normally use the ratio of domestic prices to the London Metal Exchange global benchmark to gauge whether imports would be profitable, taking into account other costs like taxes, duties and freight charges.

Chinese Imports

``At the current price ratio, Chinese traders might well export some copper out of bonded warehouses in Shanghai,'' Na wrote. ``Market rumor indicates that a large Chinese trading house was looking for ships to re-export 10,000-11,000 tons of copper in Shanghai to LME warehouses in South Korea.''

Inventories in LME warehouses, which have dropped for the past 10 days, stood at 131,925 tons yesterday.

Shanghai zinc for May delivery fell for a third day, dropping 0.5 percent to 21,245 yuan a ton, and LME three-month zinc added 0.9 percent to $2,585 a ton as of 2:04 p.m. in Shanghai.

May-delivery aluminum in Shanghai fell 1.1 percent to 20,460 yuan a ton and LME three-month aluminum, which declined by the most since January 2007 yesterday, rose 0.5 percent to $3,152 a ton at the same time.

Aluminum Supply

Aluminum prices have been ``heavily influenced'' by supply issues, as power shortages in China and South Africa cut output and as the cost of production increases with rising energy prices, according to David Moore, commodity strategist at Commonwealth Bank of Australia.

``The current high level of aluminum prices does provide an incentive for smelters to maximize production,'' Moore wrote in a report e-mailed today. ``Aluminum prices might then moderate over the second half of 2008 in response to production growth.''

Among other LME-traded metals, lead traded flat at $3,000 a ton, nickel rose 0.4 percent to $32,575 a ton, and tin didn't trade in Asia as of 2:05 p.m. in Shanghai.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

Last Updated: March 11, 2008 02:25 EDT