Copper hits 1-month low on Asia fears, tin at record

NEW YORK/LONDON, Jan 25 （Reuters） - Copper prices fell totheir lowest level in a month on Tuesday as another sharp build in London inventories and inflation fears in Asian consuming countries cast some doubts over the red metal's near-termdemand outlook.

Tin prices, however, managed to with stand the bearish tonein the base metals complex. Ongoing supply-side constraints and rising demand for the metal powered tin prices to yet another record high -- their third in as many sessions. Benchmark copper CMCU3 on the London Metal Exchange slumped $279, or 2.9 percent, to close at $9,250 a tonne.

COMEX copper for March delivery HGH1 on the New York Mercantile Exchange dropped 12.25 cents, or 2.8 percent, to settle at$4.2260 per lb.

Copper prices are down more than 5 percent since hitting record levels this month at $9,781 per tonne in London and $4.4980 per lb in New York. Analysts said the chances for a deeper near-term correction were still high. "Right now fundamentals aren't particularly supportive of prices," Barclays Capital analyst Gayle Berry said, citing weak Chinese imports, soft Chinese physical buying and LME copper inventories increasing since December. "The market had got a bit ahead of itself … This is ahealthy pullback and I think we can probably expect prices inthe very short term to remain under pressure." Concerns about Chinese monetary tightening have caused significant price volatility since inflation and GDP data forthe huge copper consumer were released last week.

India's move Tuesday to raise interest rates for a seventh time in 10 months added to the market's anxiety, with analysts saying inflation was likely to continue due to rising costs forraw materials and food. "There is increasing concern about rising interest rates inAsia. It's raising the fear that liquidity in the global markets will continue to shrink," BNP Paribas analyst Stephen Briggs said. Still, tin prices CMSN3 remained unfazed, hitting arecord high at $28,200 a tonne before ending up $100 at $28,195a tonne.         

Tin has been underpinned by supply complications in topproducer Indonesia, where exports there fell 9.2 percent inDecember from the same month in 2009 as heavy rain curtailed mining in the world's top exporter.  The metal also has been supported by rising demand. World tin demand rose by 12.5 percent last year, according to anannual survey by consultants ITRI.  RISING STOCKSLME

copper inventories jumped by 7,575 tonnes on Tuesday intheir biggest one-day increase since Dec. 30, 2009, when stockpiles grew by 10,050 tonnes. At 389,075 tonnes, LME copper stocks stand at their highest level since mid-September, but are still down by 30 percent from year-ago levels.

MCU-STOCKS The backwardation, or premium, of cash copper against the benchmark three-months contract settled at around $15, downfrom $70 just six weeks ago -- both signs that 2011 demand has been slow to ramp up.

MCU0-3 Nickel inventories continued to decline amid drawdowns fromSingapore and Rotterdam At 134,958 tonnes, nickel stocks stand around one fifth below record highs of 166,476 hit in early February 2010.

Goldman Sachs forecast nickel prices would be at $19,500per tonne by the end of the year, versus a Reuters survey of 45 analyst forecasting cash nickel prices to average $24,251 atonne this year.