Copper falls on China, U.S. data, dollar

* China manufacturing growth slows in April

* Copper inventories rise, at highest since last June

* Coming up: U.S. durable goods 1400 GMT

(Updates with official prices, adds comment)

By Sue Thomas

LONDON, May 3 (Reuters) - Copper fell to its lowest since mid-March on Tuesday as manufacturing growth in big economies slowed and inventories of the metal rose, while key data was expected to give indications on the world's economic health.

Copper CMCU3 for three-month delivery on the London Metal Exchange (LME) fell to a low of $9,194.75 a tonne compared with a close of $9,320 at the close on Thursday before a long weekend that ended on Monday. It was at $9,251 in official rings.

"The PMI for China was a bit softer when usually you would expect it to be showing some seasonal strength," Barclays Capital analyst Gayle Berry said of the country's purchasing managers' index.

"That's weighing a bit, I think people believe the tightening measures we're seeing in China are going to have something of a dampening effect on manufacturing."

China's manufacturing growth slowed in April, a survey showed, suggesting that the government's tightening efforts have weighed on the world's second-largest economy, and biggest consumer of copper, more heavily than expected. [ID:nL3E7G100E]

Although China's PMI for its services sector rose in April, the sub-index for the property sector, a major user of copper, remained below a 50 level that indicates expansion for the seventh month. [ID:nL3E7G303V]

The market will also be watching the economy of the United States, after data on Monday showed U.S. manufacturing growth continued in April but at a slightly slower pace, and ahead of data including non-farm payrolls this week.

The softer tone to U.S. economic data is expected to show up in Friday's closely watched monthly report on employment. Economists surveyed by Reuters forecast that 186,000 jobs were created in April, less than March's 216,000 and not enough to bring the unemployment rate below a high 8.8 percent.

The dollar edged off three-year lows on Tuesday, as a build-up of bets to sell it based on loose U.S. monetary policy ran out of steam. A stronger dollar makes metals more expensive for holders of other currencies.

"Maybe we're looking at a potential inflection point where we could see some dollar strengthening over the next couple of months," Daniel Brebner, an analyst at Deutsche Bank, said.

"And with risk perceptions starting to build, the sell in May and go away mantra may become more popular given some of the challenges on the macro economic front that could emerge over the next couple of months."

In Britain manufacturing activity grew less robustly than expected in April, at its weakest pace in seven months, and a sharp slowdown in new orders cast a cloud over what has been a rare bright spot in the UK economy. [ID:nSLATFE7TP]

In the euro zone, surging energy costs drove producer price inflation to its highest level in 2-1/2 years in March, strengthening the case for more interest rate rises.

[ID:nLDE7420ZQ]

Also weighing on prices, copper's inventories rose by 150 tonnes to 463,800 tonnes, the highest level since last June.

BID LADEN

Al Qaeda leader Osama bin Laden's death appeared to have little impact on commodities on Tuesday. [ID:nL3E7G307V]

"Although Osama bin Laden's demise may make the world generally a safer place and the initial impact is on reducing some of the risk premium in risk-related commodities like petroleum and precious metals, it does little to impact the longer-term supply demand situation in the global economy," S&P Senior Director of Commodity Indexes Michael McGlone said.

Tin CMSN3 was $31,850 in rings from $32,050 while zinc CMZN3, used in galvanizing, was $2,228 from $2,247 at Thursday's close.

Battery material lead CMPB3, untraded in rings, was bid at $2,515 from $2,491 and aluminium CMAL3 was at $2,752 from $2,767. Nickel CMNI3 was at $26,500 from $26,850.

Metal Prices at 1212 GMT

Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

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       419.65        0.85     +0.20     444.70     -5.63
 LME Alum      2752.00      -15.00     -0.54    2470.00     11.42
 LME Cu        9255.00      -65.00     -0.70    9600.00     -3.59
 LME Lead      2515.00       24.00     +0.96    2550.00     -1.37
 LME Nickel   26500.00     -350.00     -1.30   24750.00      7.07
 LME Tin      31850.00     -200.00     -0.62   26900.00     18.40
 LME Zinc      2228.00      -19.00     -0.85    2454.00     -9.21
 SHFE Alu     16835.00      -15.00     -0.09   16840.00     -0.03
 SHFE Cu*     69000.00     -200.00     -0.29   71850.00     -3.97
 SHFE Zin     17250.00      -70.00     -0.40   19475.00    -11.42

** Benchmark month for COMEX copper

* 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

(Editing by Anthony Barker)