METALS-Copper dips as demand prospects hit by US data

* Concern rally overdone as copper hits 10-1/2 month high. * Sentiment hit by U.S. data, analysts see price falls. (Recasts lead, updates prices, adds comment/detail) By Maytaal Angel and Michael Taylor LONDON, Aug 14 (Reuters) - Copper rose to a fresh 10-1/2 month high on Friday before reversing gains, as U.S. consumer price data offset fragile expectations of improving demand. At 1414 GMT, copper for three-months delivery on the London Metal Exchange traded at $6,298.50 a tonne from a close of $6,395 on Thursday. Earlier, prices of the metal used in power and construction hit $6,480, the highest since early October. Copper prices turned lower after government data showed that U.S. consumer prices were flat in July versus June, but fell over the past 12 months by the most since 1950. Analysts took the prices data as indicating listless consumer demand, pointing to a long road to recovery. "People have got the view that it will still be long and slow for the U.S. to exit recession, and the government is going to have to keep with its various policies to try and steer the economy out from the downturn," said Charles Kernot, an analyst at Evolution Securities. Also on the macro front, U.S. industrial production rose more than expected in July, although analysts said the numbers were largely helped by the government's "cash for clunkers" auto sales incentive programme. Analysts were also wary of a possible correction in industrial metals, with investment money said to be over-heating commodity markets and not in line with weak fundamentals. Copper surged on Thursday as traders ignored disappointing U.S. retail sales and jobless claims data and focused instead on a surprise return to growth by Germany and France in the second quarter. Copper has more than doubled since the start of the year amid record Chinese imports and hopes for an economic recovery. "As long as copper stays above $6,200 the trend remains up but people are wary about the cyclical slowdown in demand," said a trader at the LME. STOCKS RISE Capping copper prices slightly, latest data from the LME showed copper stocks rose by 900 tonnes to total 292,875. Stocks have been rising consistently since around mid-July as a seasonal lull weighs on demand. Meanwhile, copper stocks in warehouses registered with the Shanghai Futures Exchanges surged 20 percent from a week earlier to 76,107 tonnes. For a graphic on global copper stocks, click: http://graphics.thomsonreuters.com/089/GLB_CPRSTK140809.jpg. Among other industrial metals, aluminium traded at $1,991 a tonne from $2,060. Latest LME data showed stocks fell by 5,250 tonnes, but remained near a record of around 4.6 million tonnes. Tin was traded at $14,700 a tonne from $15,145. Traders remain concerned about the scale of long or buy positions in the tin market, compared with the amount of available metal in LME warehouses. . On Thursday, the spread between September tin over December widened to $750, but has since receded slightly to about $700. Zinc, used to galvanise steel, was traded at $1,845 from $1,910, battery material lead traded at $1,880 from $1,935, while nickel, used to make steel, traded at $19,865 from $20,605. Metal Prices at 1416 GMT Metal Last Change Percent Move End 2008 Ytd Percent move COMEX Cu 287.25 -3.80 -1.31 139.50 105.91 LME Alum 0.00 -2060.00 -100.00 1535.00 -100.00 LME Cu 6285.00 -110.00 -1.72 3060.00 105.39 LME Lead 1875.00 -60.00 -3.10 999.00 87.69 LME Nickel 19815.00 -790.00 -3.83 11700.00 69.36 LME Tin 14625.00 -125.00 -0.85 10700.00 36.68 LME Zinc 1840.00 -70.00 -3.66 1208.00 52.32 SHFE Alu 15240.00 -35.00 -0.23 11540.00 32.06 SHFE Cu* 50220.00 190.00 +0.38 23840.00 110.65 SHFE Zin 15020.00 -190.00 -1.25 10120.00 48.42 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07