MARKETS-METALS (UPDATE 6) * Copper inventories up nearly 5,000 tonnes * Market reassessing metals demand prospects * Weak dollar limits losses (Recasts, update prices and comments) By Humeyra Pamuk and Maytaal Angel LONDON, Nov 24 (Reuters) - Copper fell on Tuesday after a hefty jump in inventories highlighted weak physical demand, and as weaker-than-forecast U.S. data highlighted the slack pace of recovery in the world's largest economy. Copper for three months delivery on the London Metal Exchange fell to $6,894 a tonne at 1444 GMT, versus $6,950 a tonne on Monday, when it rallied to a 14-month high of $7,010 a tonne on the back of robust investor interest. Earlier, data showed the U.S. economy grew at a 2.8 percent annual clip in the third quarter, revised down from 3.5 percent estimated last month. Analysts forecast a 2.9 percent rate. Also, U.S. home prices rose for the fifth straight month but the pace of appreciation in September slowed and was less than expected. "The market is pricing in a recovery in demand which we haven't seen strong signs of yet," said Danske Bank analyst Christin Tuxen. "The data was mostly in line with expectations but there's growing concern emerging about the lack of demand." The dollar briefly cut losses against the euro after the data, but interest in the greenback soon gave way and the U.S. currency remained weak, making dollar-priced metals cheaper for non-U.S. investors. "Currencies are a pretty big theme these days," an LME trader said. "If the euro/dollar breaks above $1.50 then we could see further gains in copper, even though there are no fundamentals to support it," he said. Stocks of copper, used mainly in construction, rose 4,725 tonnes to 429,650 tonnes, the highest since end-April. Stocks have climbed 67 percent since end-July. China's latest copper imports figures on Monday further reflected the poor demand outlook. Refined imports were down by 40 percent in October and traders did not see Chinese buying resuming at copper's current higher price levels. CONTINUE TO RALLY But several analysts saw room for further gains, as the driver of copper prices is not the metal's underlying fundamentals but rather the investment money that is being poured into commodities as risk appetite increases. "It is all about the money coming into the copper market," another LME trader said. "The rally has nothing to do with the fundamentals," he said. For the longer run, there's a consensus among analysts that copper offers good returns with supply getting tighter, now and in the future. Despite weak demand this year, figures from the International Copper Study Group showed copper consumption exceeded production in the first eight months of this year. The market was in a deficit of 32,000 tonnes, versus a deficit of 117,000 tonnes in the same year-ago period. Among other base metals, aluminium, used in transport and packaging, fell $15 to $2,022. A strike at Guyana's biggest bauxite mine was unlikely to lift metal prices. A union leader said workers at the 2.5 million tonne-per-year Aroaima mine owned by UC Rusal were resisting pressure by the company to accept layoffs in return for a 10 percent wage increase for remaining workers. The operation supplies enough bauxite for more than 600,000 tonnes of primary aluminium annually. Stainless steel ingredient nickel traded at $16,650 a tonne from $16,905, zinc at $2,250 from $2,272, lead at $2,368 from $2,410 and tin was at $15,028 from Friday's last bid at $15,150 a tonne. Metal Prices at 1449 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 311.65 -1.70 -0.54 139.50 123.41 LME Alum 2015.00 -23.00 -1.13 1535.00 31.27 LME Cu 6870.00 -80.00 -1.15 3060.00 124.51 LME Lead 2363.00 -47.00 -1.95 999.00 136.54 LME Nickel 16575.00 -330.00 -1.95 11700.00 41.67 LME Tin 14955.00 -195.00 -1.29 10700.00 39.77 LME Zinc 2244.00 -28.00 -1.23 1208.00 85.76 SHFE Alu 15560.00 -290.00 -1.83 11540.00 34.84 SHFE Cu* 53880.00 -1140.00 -2.07 23840.00 126.01 SHFE Zin 18160.00 -365.00 -1.97 10120.00 79.45 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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