LONDON (Reuters) - China Construction Bank (CCB) (>> China Construction Bank Corporation) is in talks to buy UK firm Metdist Trading Limited, which would give the country's second-largest lender by assets access to top-tier trading on the London Metal Exchange, two metal industry sources said.

If the deal is successful, CCB will join a growing list of Chinese entities gaining entry to the LME, which sets global benchmark prices of industrial metals including copper, aluminium and zinc.

An official announcement of the deal's completion is expected within weeks, two sources close to the matter said.

No further details on the deal were available. Both state-owned CCB and Metdist declined to comment.

"China Construction Bank has been in talks to take over Metdist's metals trading business for a few months now," one source said.

A second source said "it may be announced the week that China's president Xi is in London, the third week of October."

President Xi Jinping will visit London next week and Chinese officials are keen to embrace a much friendlier relationship with Britain which, they say, trumps ties with other Western countries.

The 138-year-old LME, the world's oldest and largest market for industrial metals trading, has sought to lure more Chinese business since it was bought by Hong Kong Exchanges and Clearing (>> Hong Kong Exchanges and Clearing Limited) in 2012. China is the largest consumer of many commodities, and accounts for nearly half of global copper demand.

The potential addition of CCB would add liquidity to the LME's open outcry trading floor. Liquidity in commodity markets has fallen since the exit of several Western banks and hedge funds from the sector due to falling raw materials prices and tighter regulation.

Metdist Trading is a so-called Category One trader, which would give CCB access to the LME's open outcry, electronic and telephone trading.

It would join GF Financial Markets, part of GF Securities (>> GF Securities Co Ltd), one of China's largest brokerages, on the floor. Bank of China International (>> Bank of China Limited), China Merchants Securities (>> China Merchants Securities CO., LTD.) and ICBC, which has a majority stake in Standard Bank, are so-called Category 2 traders with no access to the trading pit.

Metdist, which was set up by former LME chairman Lord Raj Bagri in 1970, earned around $200 million from its 9.4 percent stake in the exchange when it was sold.

The privately-owned firm booked an operating loss of $758,726 in its 2014 financial year, but carried forward $6.2 million in profits, while shareholder assets total $17.8 million, according to the firm's filings with Companies House. 

(Reporting by Clara Denina, additional reporting by Pratima Desai and Eric Onstad in London and Zhang Shu in Beijing. Editing by Veronica Brown and Susan Thomas)

By Clara Denina