China's primary aluminium production fell 18 percent in December from a year-earlier, but rose 4.1 percent in 2008, provisional figures from the International Aluminium Institute (IAI) showed on Friday.

Output dropped to 946,000 tonnes in December from 1.147 million tonnes in the year-earlier month and 991,000 tonnes in November 2008.

The market has been waiting for confirmation that cutbacks announced by China's aluminium producers have been carried out.  Overall production for 2008 rose to 13.105 million tonnes from 12.588 million in 2007, the IAI figures showed.

Inventories of the metal, used in construction and transportation, in London Metal Exchange warehouses rose to a record of almost 2.7 million tonnes and helped push prices MAL3 on Friday to the lowest level since October 2002.

However, aluminium inventories in warehouses monitored by the Shanghai Futures Exchange fell to 179,434 tonnes from 187,588 tonnes one week earlier, the exchange said on Friday. [nBJD000556]

Aluminium prices have dropped about 60 percent since reaching record highs of $3,380 a tonne last July as output cuts by producers have failed to keep pace with the slump in demand.  To see the full breakdown of primary aluminium production please click on IAI-PROD and . Figures are in thousands of tonnes.

 (Reporting by Julie Crust; editing by Peter Blackburn)

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