* Spanish concerns weigh on euro * Tin spreads surge on nearby tightness * Spot copper demand low ahead of Chinese holiday * Coming Up: U.S. new home sales; 1400 GMT (Adds details, quotes; previous SHANGHAI) By Eric Onstad LONDON, Sept 26 (Reuters) - Copper reversed gains of the previous day on Wednesday as investors ditched metals along with other risk assets after protests in Spain renewed fears about the euro zone debt crisis and its drag on global economic growth. Three-month copper on the London Metal Exchange fell 1.3 percent to $8,164.25 per tonne by 1052 GMT, after rising 1.1 percent in the previous session. The metal widely used in construction and the power sector had gained about 16 percent from early August until hitting a 4-1/2 month peak last week on the back of central bank stimulus measures. Copper has eased nearly 3 percent from last week's high of $8,422 a tonne. "There's higher risk aversion now that the euro zone debt crisis is back in focus again. Just take a look at the pictures from Spain at the violent protests, this is putting pressure on cyclical commodities," said Daniel Briesemann, analyst at Commerzbank in Frankfurt. Protesters in Spain clashed with police, demonstrating against a new round of austerity measures, as premier Mariano Rajoy said he was ready to seek a new rescue package but only if its debt financing costs remain too high for too long. Analysts and investors were divided about whether the market would be able to build on its gains, with ANZ Bank's metal analyst Nicholas Trevethan forecasting more losses. "We may see copper slide towards $8,000, maybe even $7,800 in the next four to six weeks," he said. Others, like Brieseman view the current weakness as only a pause before the market heads higher. "I think it's just taking a breather after the maybe excessive price gains in the weeks before and I am confident that we are on a lasting upward trend," he said, citing recently announced infrastructure projects in China as supporting prices. "At the moment I'm not concerned about China at all." On the Shanghai Futures Exchange, the most active January copper contract fell 30 yuan to close the session at 59,150 yuan ($9,400) per tonne. Traders said Shanghai copper prices were also under pressure from weak buying interest in China ahead of the country's National Day holiday, for which the market will be closed from Sept. 29 to Oct. 7. "Small- and medium-sized companies usually face a credit crunch towards the end of September, when banks stop lending in preparation for their third-quarter financial reporting," said a Shanghai-based physical trader. TIGHTNESS IN TIN Although three-month tin fell 2.6 percent to $20,900 a tonne, tightness in nearby tin sent spreads surging to the highest in over two years. The premium of cash metal over the three month contract CMSN0-3 jumped to $120 per tonne by the end of Tuesday, the highest since August 2010, compared to $27 a week ago. The backwardation, however, was expected to draw metal into LME warehouses and may ease the situation, Triland Metals said. "The spread remains tight but there is tin beginning to be offered around as the back will attract material to the market," Triland said in a note. Last week, nearby tin spreads surged as shorts scrambled to cover positions, facing off against a party holding a large position. Latest LME data show one party holds 40-50 percent of combined stock warrants and cash contracts and another one has a 30-40 percent position. <0#LME-WHC> Aluminium fell 0.9 percent to $2,086 per tonne. Barclays, which released its global markets outlook on Tuesday afternoon, was wary of more gains in base metals and advised clients to sell aluminium, mainly used in transport and packaging. "Aluminium appears to be the one with the greatest potential surplus at this point, so we'd be looking to selectively short aluminium, perhaps the early 2013 contracts," Paul Horsnell, head of commodities research, told a presentation. Galvanizing metal zinc shed 1.4 percent to $2,105.75 per tonne, nickel fell 1.2 percent to $18,187 and lead lost 1.5 percent to $2,290. Metal Prices at 1100 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 372.60 -3.80 -1.01 344.75 8.08 LME Alum 2085.75 -19.25 -0.91 2020.00 3.25 LME Cu 8171.25 -103.75 -1.25 7600.00 7.52 LME Lead 2291.50 -33.50 -1.44 2034.00 12.66 LME Nickel 18199.00 -201.00 -1.09 18650.00 -2.42 LME Tin 20865.00 -585.00 -2.73 19200.00 8.67 LME Zinc 2107.00 -29.00 -1.36 1845.00 14.20 SHFE Alu 15685.00 45.00 +0.29 15845.00 -1.01 SHFE Cu* 59120.00 -20.00 -0.03 55360.00 6.79 SHFE Zin 15550.00 45.00 +0.29 14795.00 5.10 ** Benchmark 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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