* Copper hit by slowing economic prospects in U.S.
* Weak U.S. GDP, jobs data keep dollar under pressure
* Aluminium at almost 3-year high on rising cost prospects
* Coming up: U.S. regional manufacturing data Friday
(Recasts, adds New York dateline/byline, updates with New York closing copper price, adds analyst comments)
By Chris Kelly and Melanie Burton
NEW YORK/LONDON, April 28 (Reuters) - Copper erased earlier gains to end easier on Thursday, influenced by slowing economic conditions in the U.S. that underscored the bearish sentiment surrounding demand prospects at the start of the year.
Copper's mildly negative tone came after U.S. gross domestic product for the first quarter slowed to a 1.8 percent annual pace. [ID:nCAT005418]
"Copper at the moment seems to be focusing on the potential slowing economic conditions in the U.S.," said Frank Lesh, broker and futures analyst with Future Path Trading in Chicago. The number is "certainly affecting market psychology."
London Metal Exchange (LME) benchmark copper CMCU3 eased $1 to close at $9,320 a tonne. In New York, prices recovered from the late sell-off in London to end firm, with the most- active July COMEX copper contract HGN1 rising 1.50 cents at $4.2615 per lb.
Still, prices are down more than 8 percent from February's record highs of $10,190 a tonne and $4.6535 per lb.
The negative close came a day after the U.S. Federal Reserve said it would complete its $600 billion bond-buying program in June and signaled it was in no rush to scale back its support for the world's largest economy. [ID:nN26291565]
Volumes slowed at the end of a holiday-shortened week in London, with the London Metal Exchange (LME) set to close its doors Friday for a royal wedding and again on Monday for a bank holiday.
"Copper is having a hard time being pushed about the place," said Danske Bank analyst Arne Lohmann Rasmussen, adding players "are a bit worried at signs that the global recovery indicators are pointing down."
Adding to the economic jitters, U.S. claims for unemployment benefits jumped to their highest level since January. [ID:nN28251961]
The U.S. dollar extended losses against the euro and the yen after the GDP and jobless figures. A softer dollar makes metals cheaper for holders of other currencies.
"Copper is struggling a bit, but each time we get to the end of the quarter and the mining companies release their production results, then copper seems to get a bit of a lift because everyone remembers that there are supply problems," said analyst David Wilson of Societe Generale.
BHP Billiton is ploughing $554 million into boosting output at Chile's Escondida, the world's No. 1 copper mine, where output has dwindled in recent years due to declining ore grades. [IDnL3E7EU395]
Chile, which holds the world's top copper reserves and is the No.1 producer, is expected to steadily increase output in the next two years with new mine projects and upgrades, although its output fell 0.1 percent in March. [ID:nSGO002181]
COPPER STOCKS RISING
LME copper stocks MCU-STOCKS rose 150 tonnes to 463,650 tonnes, their highest since mid-June, the latest data showed. The inventories have climbed by a third since mid-December.
"The steady rise in copper, zinc and lead inventories is a prime cause for concern," Commerzbank said in a note. "If the increase in stocks is not halted soon, the upbeat view taken so far of this year's copper market balance -- a large shortfall in supplies -- may have to be revised, with the corresponding adverse impact on prices."
LME zinc stocks MZN-STOCKS have jumped by nearly 30,000 tonnes this month.
Zinc CMZN3 closed up $7 at $2,247 a tonne. Aluminium CMAL3 ended at $2,767 a tonne from a bid of $2,743.50 on Wednesday. Earlier, it touched $2,778.80, its highest since August 2008 on prospects that rising power prices will push up input costs for the energy intensive metal. Metal Prices at 1842 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 426.30 1.65 +0.39 444.70 -4.14 LME Alum 2767.50 20.50 +0.75 2470.00 12.04 LME Cu 9320.00 -1.00 -0.01 9600.00 -2.92 LME Lead 2491.00 -7.00 -0.28 2550.00 -2.31 LME Nickel 26825.00 195.00 +0.73 24750.00 8.38 LME Tin 32000.00 -700.00 -2.14 26900.00 18.96 LME Zinc 2247.00 7.00 +0.31 2454.00 -8.44 SHFE Alu 16845.00 35.00 +0.21 16840.00 0.03 SHFE Cu* 70050.00 500.00 +0.72 71850.00 -2.51 SHFE Zin 17480.00 235.00 +1.36 19475.00 -10.24 ** 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 Sue Thomas in London; editing by Anthony Barker and Rene Pastor)