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SINGAPORE, May 3 (Reuters) Copper prices edged up on Wednesday towards their recent record high on concerns over tight supply and speculative buying, but trade was subdued due to holidays in two major Asian economies -- China and Japan.

By 0602 GMT, London Metal Exchange copper for delivery in three months was at $7,145/$7,195 a tonne, against Tuesday's London close of $7,130.

''Although the trends are still overall heading higher and the bulls have been dominant since last July, the market seems to be showing some nervousness,'' William Adams, metals analyst with BaseMetals.com, said in a daily note.

''Is it worried by the threat of higher exchange margins, or the fact that the International Copper Study Group forecasts a supply surplus of 240,000 tonnes this year, or perhaps by the realisation that demand is being hit by substitution?'' Copper, used in construction and electronics, hit a record $7,385 last week, having gained as much as 68 percent this year and increasing more than fivefold from cyclical lows in 2001 on strong demand, tight supply and steady fund buying.

Investment advisers at CalPERS could firm up by August a plan for America's biggest pension fund to allocate its first $1 billion in commodities, a fund official said.

Meanwhile, run-away copper prices have caused increasing pain to metal fabricators and prompted the International Wrought Copper Council to voice its concerns.

With strong fundamentals luring investment funds into the metals sector, the development in the oil and gas market has been beneficial for precious metals and base metals as well.

''There is concern obviously that critical risk in emerging markets, especially Latin America and Africa, is now rising and as a consequence might act as constraints either on current or future supply, adding an extra dimension to already constrained supply situations,'' said Peter Richardson, chief metals economist at Deutsche Bank.

On Wednesday, spot gold hit a 25-year high of $669.30 an ounce on fund buying prompted by a weaker dollar, strong oil prices and concerns about Iran's nuclear programme, while crude oil rose to almost $75 a barrel, near record highs.

On the supply side, talks to end a drawn out strike at Grupo Mexico's giant La Caridad copper mine are not an option as long as strikers insist the company negotiate with an ousted union boss, a spokesman said on Tuesday.

And a day after Bolivia's president said the nationalisation of the energy sector was ''just the start'', the country's vice president said on Tuesday the state wanted more control of the mining industry.

Markets in Japan are closed from Wednesday through to Friday for the Golden Week holiday period, while Shanghai's futures exchange is closed for a week-long holiday break.

LME aluminium was at $2,780/$2,790 a tonne versus the London close of $2,786.

First-quarter profit more than doubled at Alcan Inc. to top analyst estimates, a record performance the company attributed on Tuesday to higher aluminium prices and better product mixes.

The company said it expects production from new capacity and restarts to increase world supply by about 4.1 percent this year, compared with a 6.9 percent rise in 2005.

As a result, it expects a market deficit of some 300,000 tonnes of aluminium, compared with a balanced market in 2005.

In other LME metals, zinc was at $3,225/$3,255 a tonne versus $3,235.

Zinc, used as an anti-corrosive coating in galvanised steel production, touched a record $3,445 last week, gaining as much as 80 percent on tight concentrates supply and growing demand from the steel sector.

Metal Prices by 0602 GMT LME ($/tonne), SFE (yuan/tonne) and COMEX (US cents/lb) Metal Last Net Change Pct Move LME Cu 7145.00 15.00 +0.21 SHFE Cu* 0.00 0.00 0.00 LME Alum 2780.00 -6.00 -0.22 SHFE Alu* 0.00 0.00 0.00 COMEX Cu** 339.00 -2.65 -0.78 LME Zinc 3225.00 -10.00 -0.31 LME Nickel 18800.00 -200.00 -1.05 LME Lead 1200.00 -5.00 -0.41 Change so far in 2006 Metal Latest bid End prev year Pct Move LME Cu 7145.00 4395.00 +62.57 SHFE Cu* 68000.00 41720.00 +62.99 LME Alum 2780.00 2276.00 +22.14 SHFE Alu* 21470.00 19360.00 +10.90 COMEX Cu** 339.00 204.20 +66.01 LME Zinc 3225.00 1905.00 +69.29 LME Nickel 18800.00 13500.00 +39.26 LME Lead 1200.00 1051.00 +14.18 LME Tin 9425.00 6475.00 +45.56 * 3rd contract months for SHFE copper and aluminium.

** 1st contract month for COMEX copper.

($1=8.02 yuan) REUTERS CS DS1240

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