MARKETS-METALS (UPDATE 5) * Market shrugs off Japanese GDP growth * Dollar falls after "Empire State" numbers * LME copper stocks down 25 percent since mid-Feb (Updates after U.S. data) By Pratima Desai LONDON, Aug 16 (Reuters) - Copper prices rose on Monday as the market focused on falling inventories, supply constraints and strong economic growth in China, the world's largest consumer of industrial metals. At 1302 GMT, copper on the London Metal Exchange traded at $7,270 a tonne from $7,156 a tonne at Friday's close. The metal used in power and construction touched a high of $7,288 as the dollar slipped against the euro following a below-consensus reading of the New York Federal Reserve Bank's "Empire State" manufacturing activity index. A weak U.S. currency makes metals priced in dollars less expensive for holders of other currencies. "The data is a little hit or miss," said David Wilson, an analyst at Societe Generale. "Overall activity was up on last month but less than expected." "If you look at the new orders, which were lower than last month, there is still some reason for caution," he added. Copper saw a low of $7,178 in early Europe time as the market digested news of weak gross domestic product (GDP) growth in Japan, one of the world's largest economies. But analysts said Japan was not a major driver of industrial metals prices. "Overall the environment for base is positive. You have falling inventories still for many metals and continued economic expansion in key countries like China, albeit at a slow pace," said Michael Widmer, analyst at Bank of America. Also helping copper prices were supply constraints -- one reason why analysts expected the copper market to be balanced or see a small deficit this year. "Unless we get a double-dip (recession), I don't see these supports subsiding," Widmer said. China was estimated to account for more than 30 percent of copper demand, forecast at about 19 million tonnes this year. A Chinese government think-tank said last week that its economy would cool further this quarter as fiscal pump-priming starts to fade and the restocking cycle draws to a close. It said annual growth would slow to 9.2 percent from 10.3 percent in the second quarter and 11.9 percent in the first. RAINS HAMPER Stocks of copper in LME warehouses at 406,700 are down about 25 percent since the middle of February when the number touched 555,075 tonnes, the highest since October 2003. Tin stocks in LME warehouses have more than halved to 13,940 tonnes since late January, and nickel inventories were down nearly 30 percent to 117,012 tonnes. Tin traded at $20,850 a tonne from $20,750 at the close on Friday, and nickel, an ingreditent in stainless steel, was at $21,500 from $21,275. "News that Glencore had tried to buy all nickel output from Norilsk may encourage the market," investment bank Fairfax said in a note. "If Glencore gains control of a significant nickel supply source, then prices could rise further." Bolstering tin prices was the news that refined tin output from Indonesia, the world's largest exporter, might fall by 20 percent from a government target of 105,000 tonnes as unseasonably long rains hamper mining. Worries about near-term supplies have pushed the market into backwardation -- a premium for cash material over the three-month contract of $200 a tonne. That compared with a small discount or contango last week. The spotlight in the aluminium market was also on spreads between different contracts. Supply concerns have seen the contango between the cash and three-month contract narrow to around $7 a tonne from $26 in late June. The premium for material to be delivered in August against that for September is around $12 a tonne. In late July that number was nearly zero. The three-month aluminium contract traded at $2,131.75 a tonne from $2,110 on Friday. Earlier it touched $2,105 a tonne, its lowest since July 30. However, the metal used in transport and packaging has been boosted by financing deals, which have tied up about 70 percent of LME stocks -- at around 4.37 million tonnes. Also a plus have been plans to launch physically backed aluminium exchange traded products. Battery material lead traded at $2,090.75 a tonne from $2,057 on Friday and zinc at $2,089 from $2,047. Metal Prices at 1308 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 329.75 4.55 +1.40 334.65 -1.46 LME Alum 2126.00 16.00 +0.76 2230.00 -4.66 LME Cu 7275.00 119.00 +1.66 7375.00 -1.36 LME Lead 2090.00 33.00 +1.60 2432.00 -14.06 LME Nickel 21480.00 205.00 +0.96 18525.00 15.95 LME Tin 20750.00 0.00 +0.00 16950.00 22.42 LME Zinc 2083.00 36.00 +1.76 2560.00 -18.63 SHFE Alu 15390.00 -25.00 -0.16 17160.00 -10.31 SHFE Cu* 57400.00 0.00 +0.00 59900.00 -4.17 SHFE Zin 17050.00 65.00 +0.38 21195.00 -19.56 ** 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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