* Copper turns positive as equity markets strengthen

* Copper canceled warrants fall

* Aluminum stocks hit record above 3.88 mln tonnes
(Recasts, updates prices, market activity to New York close; new byline,
dateline, previously LONDON)

By Carole Vaporean

NEW YORK, May 14 (Reuters) - Copper moved into positive territory after
regular trading hours on Thursday as investors took their cue from rising
equity markets.

Earlier, copper had closed lower after slumping to a two-week low. Another
round of weak U.S. economic data raised more doubts about economic recovery and
copper also came under pressure from concerns about waning Chinese demand.

Benchmark copper MCU3 on the London Metal Exchange traded at $4,315 a
tonne, the lowest since April 30. But the metal used in power and construction
ended at $4,445 a tonne, up a touch from $4,440 at the close on Wednesday.

On the New York Mercantile Exchange's COMEX, copper for July delivery
HGN9 closed down 0.40 cent at $2.0270 a lb. Overnight, the contract touched
$1.9670, its lowest level since April 29.

In after-hours trade, LME copper moved up to $4,475 a tonne and COMEX July
copper rose to $2.05 per lb.

Copper pulled up off session lows as U.S. equity markets moved higher.
Selling in both markets has attracted investors looking to put cash to work.

"The copper market turned right around the same time as the S&P (500 stock
index) started to move into positive territory and the stock market started to
do better," said Sterling Smith, vice president with FuturesOne in Chicago.

U.S. share prices rose as technology shares rebounded. A surprisingly large
rise in weekly jobless claims also boosted interest in defensive shares such as
consumer staples and healthcare. [.N]

News the U.S. administration plans to oversee over-the-counter derivatives
markets also helped copper. Smith explained the move should eventually restore
investor confidence and make banks more willing to lend, boosting the economy.

The plan proposes tighter supervision and monitoring of derivatives dealers
to get a better grip on a global market estimated at $450 trillion, blamed for
risk-taking that set off the global financial crisis. [ID:nN13414280]

"When they get that in place, copper will directly benefit because it is
the raw metal of the economy. It goes into cars, houses, into electrical
lines," he said.

Meanwhile, some remain afraid China will curb copper purchases.

Barclays Capital analyst Gayle Berry said the market was still worried
about Chinese demand, but still may have judged recent selling as overdone.

Copper prices declined earlier this week on the notion that Chinese
government and consumer stockpiling may be ending as the market looks ahead to
a seasonally weak period for metals demand. China is the world's largest
consumer of copper, accounting for about 30 percent of global demand.

"Chinese buying will be difficult to sustain," Berry said.

STRUGGLE TO MAKE SENSE

Shedding light on future price direction are canceled warrants -- stock
tagged for delivery -- in LME warehouses.

Latest data showed canceled warrants slipped to 72,525 tonnes -- still a
hefty 20 percent of total stocks at 370,650 tonnes -- from 76,225 the day
before.

Overall copper stocks in LME warehouses fell 3,100 tonnes on May 14 and are
down nearly a third since late February.

Aluminum stocks hit a record above 3.88 million tonnes on May 14 and could
reach 4 million tonnes soon. [nLC786254]

Prices for the metal, used in transport and packaging, have recovered
alongside copper, but prospects are seen as weak because the anemic auto sector
is not expected to recover soon.

Three-month aluminum fell to $1,500 a tonne, the lowest since May 1. It
closed at $1,531 from $1,525 on Wednesday.

Zinc MZN3, used to galvanize steel, and battery material lead MPB3 fell
to two-week lows of $1.432 and $1,380 a tonne.

Zinc MZN3 was last at $1,495 from $1,476 a tonne, lead MPB3 at $1,430
from $1,455 and tin MSN3 at $13,600 from Wednesday's last bid at $13,700 a
tonne. Nickel MNI3 closed at $12,550 a tonne, from $12,450.

Nickel stocks at above 111,000 tonnes are more than twice their level of a
year ago.

Metal Prices at 1628 GMT
Metal Last Change Pct Move End 2008 Ytd Pct

move
COMEX Cu 202.30 -1.40 -0.69 139.50 45.02
LME Alum 1530.00 5.00 +0.33 1535.00 -0.33
LME Cu 4445.00 5.00 +0.11 3060.00 45.26
LME Lead 1435.00 -20.00 -1.37 999.00 43.64
LME Nickel 12450.00 0.00 +0.00 11700.00 6.41
LME Tin 13675.00 -225.00 -1.62 10700.00 27.80
LME Zinc 1495.00 19.00 +1.29 1208.00 23.76
SHFE Alu 12740.00 -135.00 -1.05 11540.00 10.40
SHFE Cu* 35600.00 -1940.00 -5.17 23840.00 49.33
SHFE Zin 12430.00 -375.00 -2.93 10120.00 22.83
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

(Additional reporting by Rebekah Curtis, Veronica Brown and Pratima Desai;
Editing by David Gregorio)