* Tin committee member angry at LME's lack of action
* LME says formal complaint not received, monitoring
(Recasts lead, adds detail/comment)
By Michael Taylor
LONDON, July 7 (Reuters) - Members of the London Metal Exchange tin committee are at odds with the exchange over whether action should be taken on the large scale of long tin positions.
Market concerns centre on the September-December 2009 contracts and the amount of available metal stored in LME tin inventories, after a large number of positions were built up last week.
The worry is that market participants who are caught short of the metal at certain dates during this period could be forced to pay very high prices to cover themselves.
Earlier on Tuesday, a source on the tin committee told Reuters that it had made complaints and offered solutions to the exchange about long tin positions.
In response, an exchange spokesman said no formal complaint had been received, nor had lending guidelines been breached, but that it was monitoring the market closely.
"This has been raised in our last committee meeting and the one before," the source on the committee told Reuters. "We raised it and felt it was totally unacceptable (and) that the LME should do something about it.
On Monday, the LME said no guidelines had been issued or complaints received on the September-December 2009 tin contracts, nor was an investigation under way.
Formal LME complaints must be in written form to the exchange head of compliance, who will then notify the Financial Services Authority, Britain's main financial watchdog.
Looming tightness in the tin market is reflected in a backwardation -- where nearer dates command higher prices than those further away -- in contrast to the contango structure.
The September contract was valued at $14,405 a tonne, representing a $850 premium to December.
"It would appear to me and most people that the backwardation is totally out of line with the reality of the market place and that it is being largely controlled by one company but possibly more," the source said.
Open interest, the number of outstanding contracts, jumped to a record 36,396 lots or 181,980 tonnes on Monday, from 23,925 lots on May 1.
"Our concern is that the market is no longer orderly in that area," the tin committee source said.
LME POWERS
The LME has the power to step in and force longs to lend by imposing its 'lending guidelines' -- aimed at ensuring orderly markets.
If an LME member or client holds 50 percent or more of the warrants or cash today/cash positions, it should be prepared to lend at no more than a premium of half a percent of the cash price for a day.
After five successive days, it should be prepared to lend at no more than a quarter percent of the cash price.
Essex-based hedge fund Ebullio on Monday declined to comment on market talk it was one of the groups behind the tightness in the tin market and held to that position on Tuesday.
"Nothing has changed from our end," Gregory Cain, a trader at Ebullio said on Tuesday. "We're just continuing our day to day activities, trading as per normal." He declined further comment.
LME tin inventories currently stand at 17,315 tonnes -- their highest since August 2003.
Earlier on Tuesday, tin prices dipped after the committee member news. Three month prices are currently at about $14,300 from a closing bid of $14,250 on Monday.
The tin committee source said the exchange should extend its remit to cover forward positions as well as cash.
"The LME remit covers cash positions and not forward positions and we suggest they look at this and put something in place," the source added. "If they feel the market is disorderly, they can do anything. They have to ensure orderly markets." (Reporting by Michael Taylor; editing by Keiron Henderson)