* BHP sees signs of "flattening" iron ore demand from China * Dollar supported by signs of improving U.S. economy * Coming up: U.S. housing starts/building permits; 1230 GMT By Susan Thomas LONDON, March 20 (Reuters) - Copper fell on Tuesday as the euro and equities markets retreated and after BHP Billiton, the world's biggest miner, raised concerns about the possibility of a sharp slowdown in demand from t o p metals consumer China. Three-month copper on the London Metal Exchange fell 1 percent to $8,485 per tonne by 0956 GMT from a close of $8,570 on Monday. The metal hit its highest in two weeks at $8,690 on Friday and is up more than 12 percent this year, but has struggled to breach that level. "It's choppy within a range. It's partly dollar strength, but also I suspect a rather more cautious commentary from BHP," BNP Paribas analyst Stephen Briggs said. "There is a slowing trend in China ... moving increasingly away from the growth model that they have had, which may be a little less metals intensive. This is not new, but recognition by big mining companies would have had an effect." Australian iron ore miners, key beneficiaries of China's modern-day industrial revolution, signaled on Tuesday demand growth was finally slowing in response to Beijing's moves to cool its economy. BHP Billiton said it was seeing signs of "flattening" iron ore demand from China, though for now it was pushing ahead with ambitious plans to expand production. Official Chinese data last week showed home prices fell in February from January for a fifth consecutive month, and the government reaffirmed its commitment to measures to control the property market to cool speculation. China accounts for 40 percent of global refined copper demand. Copper is used mostly in building construction and power. Demand in the world's biggest copper consumer has not picked up after the Lunar New Year holiday in late January, prompting importers to delay some term shipments, traders have said. The dollar, while still hovering near a one-week low against a basket of currencies, is being supported by recent signs of improvement in the U.S. economy. Gains in the dollar can pressure dollar-denominated commodities by making them more expensive for consumers using other currencies. HOUSING Investors are closely watching U.S. housing figures which will be released later on Tuesday for an indication about metal demand, Credit Suisse Private Banking said in a note. "Market participants expect a moderate pick-up of activity from very low levels. This would be positive news for metals, as housing accounts for a sizeable share of metals demand," it said. European stocks edged lower as investors eyed talks between Italy's government and unions on reforms seen key to turning around the euro zone's third largest economy. Nickel, used in steelmaking, fell 0.9 percent to $18,885 from $19,050 at Monday's close. Zinc, used to galvanize steel, was down 1.1 percent at $2,054 from $2,079. Tin fell 1.5 percent to $23,250 from $23,595, lead was at $2,073 f rom $2,108 and aluminium was $2,253 from $2,275. Metal Prices at 0956 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 386.45 -4.25 -1.09 444.70 -13.10 LME Alum 2251.25 -23.75 -1.04 2470.00 -8.86 LME Cu 8490.00 -80.00 -0.93 9600.00 -11.56 LME Lead 2066.75 -41.25 -1.96 2550.00 -18.95 LME Nickel 18885.00 -165.00 -0.87 24750.00 -23.70 LME Tin 23300.00 -295.00 -1.25 26900.00 -13.38 LME Zinc 2051.25 -27.75 -1.33 2454.00 -16.41 SHFE Alu 16265.00 -10.00 -0.06 16840.00 -3.41 SHFE Cu* 60350.00 50.00 +0.08 71850.00 -16.01 SHFE Zin 15885.00 10.00 +0.06 19475.00 -18.43 ** 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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