METALS-Copper dips on dollar bounce, China reaction

* China Q3 GDP up 8.9 pct, most metals output up * Rising inventories hint at weak demand outside China * Dollar recovers from 14-month lows after China data (Recasts with New York closing copper prices, adds comments, NEWYORK to dateline) By Chris Kelly and Michael Taylor NEW YORK/LONDON, Oct 22 (Reuters) - Copper stumbled into theclose on Thursday, with prices in New York dipping back down below$3 per lb, as a firmer dollar weighed on values and upbeat economicdata from China was met with a cautious market reaction. Copper for December delivery HGZ9 on the New York MercantileExchange's COMEX division shed 3.80 cents to close at $2.9980 a lb,after dealing in a session range between $2.9770 and $3.0310. On the London Metal Exchange (LME), copper for three-monthsdelivery MCU3 was untraded in closing rings, but bid at $6,585 atonne from a close of $6,590 on Wednesday, when the metal used inpower and construction hit $6,665, its highest since September lastyear. Seemingly bullish third-quarter growth data from China, theworld's leading copper consumer, was met with mixed feelings. "I think there was a mixed reaction to the news as some areconcerned that such swift GDP growth will lead to less fiscalstimulus ... and in turn, less demand," said Catherine Virga, seniorbase metals analyst with CPM Group. China's annual economic growth quickened to 8.9 percent in thethird quarter, as expected and refined copper output in the world'slargest metals consumer rose to a record 394,800 tonnes inSeptember. [ID:nSP452724] [ID:nPEK175104] "It's fairly clear that demand outside China is still prettylacklustre," said Dan Smith, a metals analyst at Standard Chartered. "The recent Chinese data has been pretty upbeat overall ... we'vebecome more bullish on China in the last month." Chinese refined production of zinc, nickel and primary aluminumalso increased and industrial production rose to 13.9 percent inSeptember from a year ago. "The data painted a robust picture of demand in China and takenin conjunction with supply-side issues there's still a verypersuasive story in copper, even without signs of recovery inEurope," said Nicholas Snowdon, analyst at Barclays Capital. All eyes were on developments at Chile's Spence copper mine,where workers plan to resume wage talks with owner BHP Billiton tosolve a nine-day strike. [ID:nN21509686] CPM Group's Virga said the strike at Spence was amplified byBHP's declaration on Wednesday of force majeure at company's OlympicDam mine in Australia. [ID:nSYD244674] Furthermore, workers at Chile's Andina copper mine demanded afive percent wage hike to owner Codelco. [ID:nN21517808] "There is the potential for these issues to gain traction due tothe fact that there is no near-term relief to these supplyconcerns," Virga said. "I wouldn't be surprised if we saw a littlebit more strength in the market." But weighing on metal prices was the dollar, which rose broadly,making dollar-priced metals more expensive for non-U.S. investors. [USD/] Latest LME data showed copper stocks rose 1,525 tonnes to total364,075 tonnes, the highest since mid-May and up more than 50percent since the middle of July. MCU-STOCKS ZINC JUMPS In other metals, zinc, used to galvanize steel, was boosted byprospects for increased demand in China. [ID:nN21494542] "Zinc has firmer premiums. It is one of the metals that standsto gain most leverage from fiscal stimulus in China. Investment ininfrastructure ... in September was a key source of support forgalvanized steel," said Snowdon. Three-month LME zinc MZN3 rose to $2,265 a tonne, the highestsince May 2008 but closed at $2,250 versus $2,235 on Wednesday. Among other industrial metals, aluminum MAL3 ended at $1,966 atonne from $1,966, having earlier hit a 2-month high of $1,999.75while battery material lead MPB3 closed at $2,405 from $2,445. Tin MSN3 touched a three-week high of $15,075 but ended$15,000 from $14,450, and steel-making ingredient nickel MNI3 wasat $19,200 from $19,735. Metal Prices at 1848 GMT Metal Last Change Pct Move End 2008 Ytd Pct move COMEX Cu 299.70 -2.95 -0.97 139.50 114.84 LME Alum 1963.00 -3.00 -0.15 1535.00 27.88 LME Cu 6580.00 -10.00 -0.15 3060.00 115.03 LME Lead 2379.00 -66.00 -2.70 999.00 138.14 LME Nickel 19250.00 -485.00 -2.46 11700.00 64.53 LME Tin 14850.00 400.00 +2.77 10700.00 38.79 LME Zinc 2239.50 4.50 +0.20 1208.00 85.39 SHFE Alu 14985.00 20.00 +0.13 11540.00 29.85 SHFE Cu* 50460.00 430.00 +0.86 23840.00 111.66 SHFE Zin 16445.00 240.00 +1.48 10120.00 62.50 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07