METALS-Copper falls more than 4 pct on weak demand

* China's modest interest rate cut fails to support copper

* World refined copper surplus up 67 pct -- ICSG

* Aluminium firmer as cutbacks offset inventories rise

(Adds closing ring prices)

By Michael Taylor

LONDON, Dec 23 (Reuters) - Copper shed 4.2 percent on Tuesday as investors shrugged off China's smaller-than-anticipated interest rate cut while concerns over demand due to a worsening economic outlook returned.

China trimmed interest rates on Monday in the latest step to fend off a deepening economic slowdown, but the cut, the fifth since mid-September, was smaller than many analysts had expected. [ID:nPEK312116]

Copper for three-month delivery MCU3 on the London Metal Exchange closed at $2,870 a tonne in rings from $2,960 at the close on Monday and compared with a session low at $2,837.