(Updates prices, adds analyst comment and LONDON dateline)

By Eric Onstad

LONDON, June 27 (Reuters) - Copper prices hit their

weakest in more than two months on Thursday as more bullish

positions were scrapped, inventories kept rising and demand

remained lacklustre in top metals consumer China.

Three-month copper on the London Metal Exchange

touched an intra-day low of $9,485.50 a metric ton for its

weakest since April 17 before recovering to be up 0.2% at $9,562

by 1015 GMT.

"The rise in total exchange copper stocks to over 500,000

ton is not something the market likes when it's already under

pressure from long liquidation," said Ole Hansen, head of

commodity strategy at Saxo Bank in Copenhagen.

Copper stocks registered with the world's big three

exchanges have risen above 500,000 metric tons for the first

time since August 2021.

LME inventories have surged by 72% since

mid-May to 177,750 tons, the highest in more than six months.

"The question is how deep can this correction go. The area

just below $9,500 is an important technical level and if we

continue lower from there, then we're potentially looking at

$9,100 next," Hansen said.

After rallying to a record high of $11,104.50 on May 20,

prices have fallen more than 14% on sluggish economic data from

China and uncertainty surrounding U.S. interest rates.

Adding to worries about weak physical copper demand in China

was data on Thursday showing China's industrial profit growth

slowed sharply last month.

The most-traded August copper contract on the Shanghai

Futures Exchange eased 0.6% to 77,550 yuan

($10,669.18) a ton.

"Inventory levels of copper continue to surge in China,

while local premiums remain low, signalling little sign of

physical demand to back to euphoric positioning in the West,"

TD Securities analysts said in a note dated Wednesday.

In other metals, LME aluminium dipped 0.2% to $2,507

a ton, zinc was little changed at $2,940.50, lead

was down 0.3% at $2,189.50 while nickel gained

0.6% to $17,165 and tin rose 0.6% to $32,200.

($1 = 7.2687 Chinese yuan)

(Reporting by Eric Onstad

Additional reporting by Ashitha Shivaprasad in Bengaluru

Editing by David Goodman

)