Aug. 2 (Bloomberg) -- Copper declined from a record in London amid speculation that inventory stored in London Metal Exchange-registered warehouses may rebound, increasing the supply of the metal used to make power cables.

Stockpiles rose 25 metric tons, or 0.1 percent, to 31,550 tons, the exchange said today in a daily report, the fourth consecutive gain. Inventories have fallen 35 percent this year and are equal to less than one day's global consumption.

Speculation about further deliveries to warehouses ``is the dominant talk out there now,'' said Maqsood Ahmed, an analyst in London with Credit Agricole SA's Calyon Global Trading unit, who has followed the metals and mining industry since 1993. ``There is good production news. There has to be material out there.''

Copper for delivery in three months on the London Metal Exchange, or LME, fell as much as $13, or 0.4 percent, to $3,555 a metric ton. The contract traded at $3,566, down 0.1 percent, as of 10.18 a.m. in London. Copper yesterday traded as high as $3,580, the eighth consecutive day it has touched a record. It has risen 13 percent this year.

Copper stockpiles may be used by consumers to help fill a gap between demand and production that analysts estimate will emerge this year. Copper usage will beat production from mines and recycled scrap by 189,000 metric tons this year, Canaccord Capital said in a July 18 report.

Concern that some stockholders may be keeping back supply in ``hidden'' stockpiles also drove prices lower, Ahmed said.

``This is what the seasoned traders are talking about, and why they won't touch the market,'' he said. ``For them the top of the cycle was $2,700 to $2,900, and beyond that the level of commitment has been quite limited.''

Aluminum rose on the LME, gaining $16 to $1,888. Nickel was unchanged at $14,350 and zinc was up $10 to $1,293. Lead dropped $2 to $875 and tin was unchanged at $7,200 a ton.

To contact the reporter on this story: Simon Casey in London scasey4@bloomberg.net Mark Cobley in London at mcobley@bloomberg.net

Last Updated: August 2, 2005 05:36 EDT