METALS-Copper slips after China imports drop

* Closes 2 pct down as China factor eclipses weak dollar * Rising inventories add to investors' worry (Recasts, updates prices to close of U.S. session; adds NEWYORK to dateline, new byline) By Barani Krishnan and Michael Taylor NEW YORK/LONDON, Sept 23 (Reuters) - Copper prices closeddown 2 percent on Wednesday as investors briefly took theireyes off the U.S. dollar, focusing on China's eroding demandfor the industrial metal. China's refined copper imports fell by a quarter in August,from July, data showed. It was the second month in a row thatthe top copper consumer had cut back on demand -- after recordbuying earlier in the year -- and reflected upon risinginventories of the metal. [ID:nHKG189580] China may be holding nearly 1.2 million tonnes of refinedcopper stocks, or about 80 days of consumption, according toAntaike, a Chinese state-backed research group.[ID:nHKG326569] "The market is worrying that stronger OECD demand won'tcome in time to offset the slowdown in Chinese imports," Barclays Capital analyst Gayle Berry said, referring to demandfor copper from developed countries. "We'll see Chinese imports continue to fall over the nextcouple of months," she said. Inventories of copper have been trending higher since earlyJuly at warehouses tracked by the London Metal Exchange,reversing constant falls seen earlier in the year. On Tuesday,LME copper stocks rose another 175 tonnes to 331,950 tonnes. In Wednesday's session, U.S. copper for December deliveryHGZ9 settled down 5.65 cents, or almost 2 percent, at $2.8080a lb on the New York Mercantile Exchange's COMEX division. LMEcopper for three-months delivery MCU3 closed down $144, or2.2 percent, at $6,126 a tonne. The dollar rose modestly while copper traded in New Yorkand London, as investors braced for the outcome of a two-daypolicy meeting by the U.S. Federal Reserve. The Fed said after the meeting that the economy wasrecovering and left interest rates unchanged at record lows. [ID:nN23390829] That pushed the dollar to a new year-lowagainst the euro. Copper prices have more than doubled since the lows of thefinancial crisis last year. The dollar's weakness had fueledmuch of the rally lately, as investors used stronger currenciesto buy the cheapening dollar-denominated metal. But with China scaling back heavy purchases now, copperprices may depend more on demand than currency factors, someanalysts said. "The big push higher is now starting to settle into atrading range," Edward Meir, a metals analyst at MF Global inNew York, said in his outlook for copper. Some analysts disagree with that. "I think you still have a very nicely trending inverserelationship between the dollar and copper, barring theoccasional break, and this rally has a lot more wind to it,"said Michael K. Smith, president of T & K Futures and OptionsInc. in Port St. Lucie, Florida. That was also the view of Ralph Preston, analyst atHeritage West Futures in California. "The dollar looks verymuch like an apple ready to fall off a tree and I don't thinkthere's anything that going to be more influential to copperprices in the near future than that." Other key base metals traded on the LME also closed mostlydown. Aluminium MAL3, used in transport and packaging, endedat $1,873 from $1,889. Stocks of aluminium at LME warehousesdropped 4,250 tonnes but stood just below a record high above4.6 million tonnes. Zinc MZN3 closed at $1,903 from $1,946 and batterymaterial lead MPB3 ended at $2,240 from $2,289. Tin MSN3 closed unchanged at $14,650. The backwardationon the metal MSN0-3 -- a premium for cash material overthree-month delivery -- shot up to about $730, versus $260 onSept.17. [ID:nLN605546] Nickel MNI3 was closed at $17,875 from $17,750. Metal Prices at 1613 GMT: Metal Last Change Pct Move End 2008 Ytd Pct move LME Alum 1869.00 -20.00 -1.06 1535.00 21.76 LME Cu 6155.00 -115.00 -1.83 3060.00 101.14 LME Lead 2247.00 -42.00 -1.83 999.00 124.92 LME Nickel 17870.00 120.00 +0.68 11700.00 52.74 LME Tin 14475.00 -325.00 -2.20 10700.00 35.28 LME Zinc 1910.00 -36.00 -1.85 1208.00 58.11 SHFE Alu 14875.00 -50.00 -0.34 11540.00 28.90 SHFE Cu* 48220.00 -430.00 -0.88 23840.00 102.27 SHFE Zin 15120.00 -160.00 -1.05 10120.00 49.41 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Marguerita Choy)