LONDON, Feb 8 (Reuters) - Aluminium prices reached their highest since 2008 on Tuesday, buoyed by investor concern over tight supply and falling inventories.

       Benchmark aluminium on the London Metal Exchange (LME) was up 1.6% at $3,183.50 a tonne by 1743 GMT after rising as high as $3,236.

       The lightweight metal used in packaging and transport has shot up by about 14% this year after gaining 42% in 2021 as China, which produces more than half the world's supply, restricted output to reduce pollution.

       Chinese smelters use huge amounts of electricity generated by coal-fired power plants.

       "In the run-up to the Beijing Olympics there's been a lot of reduction in aluminium production to improve air quality," said WisdomTree analyst Nitesh Shah, predicting that rising demand would push prices higher over the long term.

       OUTBREAK: Compounding supply fears was an outbreak of COVID-19 in the aluminium-producing Chinese city of Baise.

       Aluminium output in Baise, which has gone into lockdown, remains stable though transportation disruptions are starting to weigh, the local industry association said.

       INVENTORIES: Aluminium stocks in LME-registered warehouses have fallen to the lowest level since 2007 at 767,700 tonnes, down from almost 2 million tonnes last March.

       Inventories in Shanghai Futures Exchange (ShFE) warehouses have fallen nearly 20% to 266,906 tonnes since the start of the year -- a period in which ShFE stocks typically rise.

       SPREAD: Concern about supply on the LME drove quickly delivered cash metal's premium over the three-month contract as high as $40 a tonne, the most since July 2018.

       RUSSIA: The threat of sanctions against Russia if it attacks Ukraine has intensified supply concerns. Russia is a major aluminium producer.

       SLOVALCO: Slovak aluminium smelter Slovalco on Monday said it had cut output to about 60% of capacity because of the high cost of power and emissions allowances and a lack of government compensation.

       PERU COPPER: Mining activity at Peru's Las Bambas copper mine, which accounts for 2% of global supply, has started to fall sharply after protesters blocked a key access road.

       COLUMN: Copper could face another inventory squeeze, writes Reuters columnist Andy Home.

       OTHER METALS: LME copper was up 0.1% at $9,791 a tonne, zinc fell 0.7% to $3,601.50, lead rose 0.6% to $2,207.50, tin was down 0.3% at $42,810 and nickel slid 3% to $22,690.- Reuters