METALS-Copper ends 1st quarter down on slack China demand

 * Chinese demand concerns drag copper down 2.4 pct in Q1
 * LME copper stocks continue builds, compound demand worry
 * Coming up: China manufacturing/U.S. jobs data Friday
 (Recasts, updates prices, market activity, adds second byline, dateline,
previously LONDON)
 By Chris Kelly and Rebekah Curtis
 NEW YORK/LONDON, March 31 (Reuters) - Copper closed slightly higher on
Thursday but ended the first quarter of 2011 with a 2.4 percent quarterly loss,
its first such decline since the second quarter of 2010, as concerns about
softer Chinese demand and rising warehouse stocks weighed on sentiment.
 Traders cited book squaring and the weak dollar for Thursday's higher
close. For the quarter, copper diverged from the broader base metals complex,
with tin (CMSN3: Quote, Profile, Research) rallying 18.3 percent, aluminium (CMAL3: Quote, Profile, Research) up 7.2 percent, and
lead (CMPB3: Quote, Profile, Research) and nickel (CMNI3: Quote, Profile, Research) each about 5 percent firmer.
 Copper prices are off more than 7 percent from their record highs hit last
month at $10,190 per tonne in London and $4.6575 per lb in New York. With
sustained softness in Chinese buying and a buildup in London warehouse stocks,
prices are expected to remain weak in the near-term.
 "The Chinese market has hit a soft spot lately, reflected in the sharp fall
of physical premiums and more metal delivered in LME and Shanghai warehouses,"
said Duncan Hobbs, an analyst at Macquarie.
 "All these things reflect that the market is definitely soft at the
moment."
 London Metal Exchange (LME) copper for three-months delivery (CMCU3: Quote, Profile, Research) rose
$49 for the day to end at $9,430 a tonne. For the quarter, that was down 2.4
percent from the final three months of 2010, its first quarterly loss since
June.
 COMEX May copper (HGK1: Quote, Profile, Research) settled up 3.35 cents at $4.3075 per lb. It
finished the quarter down 3 percent.
 "We're still all wondering where is the Chinese buying that we were all
looking for ... the fact is they have adequate supplies, so they can let the
price come to them," said Frank Lesh, broker and futures analyst with Future
Path Trading in Chicago.
 High bonded stocks in China, estimated at about 600,000 tonnes, were seen
discouraging fabricators from building copper stocks. [ID:nL3E7EO0VC]
 Compounding concerns about weak physical demand, stocks of copper
(MCU-STOCKS: Quote, Profile, Research) have been on a steady ascent since December, rising 125 tonnes to
their highest since July 2010, at 439,850 tonnes.
 Base metals have been knocked this year by turmoil in the Middle East and
North Africa, which has boosted oil prices and stoked inflation concerns, and
by the earthquake, tsunami and nuclear disaster in Japan. (nTOPMEAST: Quote, Profile, Research) (nTOPJP: Quote, Profile, Research)
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Graphic on commodity performance in Q1 2011 and Q4 2010:
 http://r.reuters.com/tep68r
 Graphic of asset returns in Q1 2011:
 http://r.reuters.com/wur78r
 Graphic of key events in Q1 2011 timeline:
 http://r.reuters.com/saj68r
 For the top stories in metals and other news, click
 [TOP/MTL], [TOP/MACRO] or [MET/L]
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 Aluminium firmed $16 to end at $2,645 a tonne. It has been underpinned by
higher energy costs which lifted prices to a 2-1/2-year high of $2,656 earlier
this week.
 "In terms of supply and demand dynamics, Chinese output picked up earlier
this year, as the government-imposed power restrictions were eased once again,"
Credit Suisse said of the metal in a note.
 "However, supply growth is unlikely to match demand growth in our view. As
a result inventories should fall, providing cyclical support for prices."
 Zinc (CMZN3: Quote, Profile, Research) rose $24 to $2,362 a tonne.
 Dowa Mining Holdings Co (5714.T: Quote, Profile, Research) said it plans to resume operations of its
200,000 tonnes-a-year Akita zinc smelter in north-eastern Japan in early April.
[ID:nTKU000116]
 The Akita plant is Japan's biggest zinc smelter, accounting for nearly 30
percent of Japan's total production. Nearly 65 percent of Japan's production
capacity of zinc has been suspended since the March 11 earthquake.
 Metal Prices at 1945 GMT
 COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
 Metal            Last      Change  Pct Move   End 2010   Ytd Pct
                                                         move
 COMEX Cu       430.15        2.75     +0.64     444.70     -3.27
 LME Alum      2648.00       19.00     +0.72    2470.00      7.21
 LME Cu        9427.00       46.00     +0.49    9600.00     -1.80
 LME Lead      2694.00        9.00     +0.34    2550.00      5.65
 LME Nickel   26090.00       60.00     +0.23   24750.00      5.41
 LME Tin      31795.00      545.00     +1.74   26900.00     18.20
 LME Zinc      2360.00       22.00     +0.94    2454.00     -3.83
 SHFE Alu     16775.00      -60.00     -0.36   16840.00     -0.39
 SHFE Cu*     70700.00     -600.00     -0.84   71850.00     -1.60
 SHFE Zin     18240.00     -135.00     -0.73   19475.00     -6.34
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
  (Additional reporting by Pratima Desai in London; editing by William Hardy
and David Gregorio)


METALS-Copper ends 1st quarter down on slack China demand