Copper drops to three-week low on demand worries, aluminium up

* Weak U.S. home sales, consumer spending data
* Chinese speculators hit copper on Shanghai exchange
* London volumes retreat as Thanksgiving, year-end loom
* Nickel stocks rise to fresh record

(Reuters) - Copper fell to a three-week low on Wednesday after soft U.S. economic data and as Chinese speculators hit the market amid worries about weak demand.

Aluminium, however, gained on concern about shortages.

Three-month copper on the London Metal Exchange

(LME) fell to its lowest since Nov. 5 at $6,558 a tonne in intraday trade before paring losses to close 0.6 percent weaker at $6,570.

Volumes on the LME shrank ahead of the U.S. Thanksgiving Day holiday on Thursday.

"It has been a difficult year for speculators to make money and I don't think they are going to risk making bigger losses or eroding some of their gains in the final few weeks of the year, particularly when there aren't really any big stand out stories," said Gayle Berry, metals strategist at Jefferies.

On the Shanghai Futures Exchange, however, turnover climbed four-fold and open interest surged 11 percent as speculators sold copper, said analyst Leon Westgate at Standard Bank.

"With general sentiment at last week’s Asian Copper Week remaining negative... it appeared to be only a matter of time before the more bearish elements of the Chinese speculative community again had another go at shorting the metal."

The metal used in power and construction has been trading in a range between roughly $6,500 and $6,800 a tonne since mid-September and is down more than 10 percent this year.

It hit a three-week high of $6,772.50 a tonne last week following China's surprise interest rate cut. That cut may boost liquidity to businesses after about six months, said Colin Hamilton, head of commodity research at Macquarie.

"This is not an aggressive stimulus ... but it certainly underpins what we're looking at in terms of low single-digit growth rates for steel demand and mid single-digit growth rates for base metals demand into next year," he told a presentation.

Weak U.S. data on consumer and business spending added to jitters about global growth. 

Aluminium rose 0.6 percent to close at $2,061 a tonne as a key spread remained at the highest levels in nearly two years, indicating lack of spot material.

Nickel ended down 1.1 percent at $16,350 a tonne after LME stocks rose to a fresh all-time high.

Zinc finished up 0.1 percent at $2,273 a tonne, lead added 0.5 percent to $2,062.50 and tin rose 0.4 percent to close at $20,275.