By Nick Trevethan SINGAPORE (Reuters) - Shanghai metals slipped as much as 5 percent on Thursday as London futures pared early gains and worries about the parlous state of the world economy continued to erode sentiment after a start-of-the-year rally. Zinc was hardest hit, falling by its 5 percent daily limit in Shanghai, after an 8 percent slide in London, but copper also slipped after a substantial rise in London Metal Exchange stocks and record refined Chinese imports in December. Shanghai copper fell 1,210 yuan, or 4.5 percent, to 26,010 yuan by 0235 GMT, after London copper stockpiles hit a five-year high. LME copper reversed an early 2 percent rally to trade $10 lower at $3,205. LME copper stocks rose overnight, adding 8,375 tonnes to 417,475 tonnes -- equivalent to the amount of copper in 2.1 million typical U.S. homes and enough to supply the world with copper for more than a week. Analysts said weakness in copper would continue in the near term, with prices likely to slip below $3,000 again. "The falls are tied to the demand situation and the big stock rises we have seen on the LME," Judy Zhu, analyst at Standard Chartered said. "For many metals there is downside room, but copper has the potential to be the biggest loser. It is possible that it will fall below $3,000 in the next few weeks." However, in the second half, there was potential for a significant recovery in prices once demand starts to improve. "We expect copper to rebound strongly in the second half," Zhu said. "We have seen production cuts by high-cost smelters and problems developing new mines." Record-high Chinese copper imports, up almost 90 percent in December at 211,527 tonnes, could also weigh on sentiment, given relatively soft fourth quarter Chinese GDP data For a graphic showing China's combined copper imports, click: https://customers.reuters.com/d/graphics/CN_CPIMP220109.gif Annual GDP growth fell to 6.8 percent in the fourth quarter from 9.0 percent in the third quarter, dragging down the pace of expansion for all of 2008 to a seven-year low of 9.0 percent, the government said. "This downward trend is set to continue, with growth in H1, in particular, likely to be very weak," Royal Bank of Canada said in a note to clients. "Policy stimulus and infrastructure spending should help stabilise growth in H2, but any rebound will be tentative and highly dependent on the strength of any global recovery. We expect growth of 6.0 percent for 2009 as a whole, with risks still skewed to the downside." Shanghai April zinc sank 530 yuan to 10,045 yuan a tonne from Wednesday's settlement, after London Metal Exchange futures fell $100 overnight when stocks of the metal jumped 11,775 tonnes to 288,300, their highest in almost three years. Aluminium futures in Shanghai dipped 210 yuan to 11,195 yuan, chasing a fall of 4.6 percent in London. On Wednesday, aluminium for delivery in three months on the London Metal Exchange dropped as low as $1,330 a tonne, its weakest since April 2003. On Thursday, the lightweight metal was quoted at $1,345 up $10. LME zinc fell $15 to $1,135. Aluminium inventories in LME warehouses jumped 88,975 tonnes, the largest one-day surge since December 18, to above 2.64 million tonnes, within sight of the record high set in June 1994. | 
