LONDON - Copper leapt as much as 8 per cent on Tuesday to its highest since late October, tracking a rally in the Chinese market and as a fall in inventories improved the outlook for demand.



Copper for three-months delivery on the London Metal Exchange hit $4,925 (U.S.) a tonne in early trade, its highest since Oct. 20, from Thursday's $4,550 a tonne.



The metal used in power and construction was $4,650 a tonne by 0945 GMT. It has risen more than 50 per cent since the start of the year.



But analysts said the rally would likely come under pressure as investors pocketed profits.



"It's shot its bolt too soon...It needs to consolidate around here before pushing higher," said Leon Westgate, an analyst at Standard Bank.



The Chinese market rallied 10 per cent in the previous two sessions, while London markets were closed for Easter.



Prices were spurred by a surge in domestic bank lending in March in China, an 8.3 per cent rise in industrial output, record copper imports and talk the country plans a new economic stimulus package.



Soothing concerns about the outlook for demand, stocks of copper at LME warehouses fell by 4,775 tonnes to 492,000 tonnes.



Cancelled warrants - material tagged for delivery - stood at 66,700 tonnes, up from 60,850 at the start of last week and compared with 29,375 at the end of March.



The market believes the cancelled warrants - increasingly based in European warehouses - represent material heading for China, the world's biggest consumer of the metal.



A rally in equities also boosted sentiment.



"Risk aversion is gradually gaining pace," said Andrey Kryuchenkov, an analyst at VTB Capital.



Mr. Kryuchenkov said profit-taking could drive copper prices down towards $4,400, adding a stronger U.S. dollar had also put the reins on gains. A stronger U.S. currency makes metals priced in dollars more expensive for holders of other currencies.



Other metals were mixed. LME nickel was at $11,415 from $11,040, having surged in early trade to $11,750 - its highest since early February.



Aluminum fell to $1,510 from $1,536, after earlier hitting $1,555 a tonne, its highest since early January.



Aluminum stocks continued a seemingly relentless rise to a record, climbing by 100,100 tonnes to above 3.6 million tonnes.



The metal used in transport and packaging has been hammered by the economic downturn, wreaking carnage in the autos industry.



Zinc was at $1,417.5 a tonne from $1,393. It earlier touched $1,439, its highest since mid-October.



Lead traded at $1,425 a tonne from $1,401, having earlier struck $1,455, its highest since early November, while tin was at $10,950 a tonne from $10,995.