* China tightening seen having desired effect
* LME copper stocks in the spotlight
(Updates prices, adds quote)
By Pratima Desai
LONDON, May 12 (Reuters) - Copper tumbled to a five-month low on Thursday as investors headed for the exits, fearing slower economic growth and demand from top consumers China and the United States.
Copper recovered some poise after China hiked the bank reserve requirement ratio as the market started to think about an end to the country's tightening cycle in China.
Weighing on sentiment though was the stronger dollar .DXY across a basket of currencies, which makes commodities priced in dollars more expensive for holders of other currencies. [USD/]
Benchmark copper CMCU3 on the London Metal Exchange traded at $8,655 a tonne at 1408 GMT from an earlier low of $8,504.50 a tonne, its lowest since Dec 1. The metal used in power and construction closed at $8,700 a tonne on Wednesday.
The latest lurch lower started on Wednesday after data from China showed industrial output growth eased more than expected in April, pointing to a cooling in the world's second-biggest economy. [ID:nL3E7GB0H2] [ID:nL3E7GC0JV]
U.S. data showed the world's largest economy struggled to gain momentum early in the second quarter, with retail sales posting their smallest rise in nine months in April and wholesale prices increasing more than expected. [ID:nN12296928]
"We're getting concerns about slowing growth, rising inflation, rising interest rates, money leaving the commodities sector," Edward Meir, senior commodity metals analyst at MF Global, said.
"And when markets sell off, you have a run into the dollar which exacerbates things even more."
China on Thursday hiked the reserve requirement ratio for its commercial banks by 50 basis points, extending its campaign to calm prices, the eighth rise since October. [ID:nLDE74B18Y]
"There is a good chance that the pace of RRR (reserve requirement ratio) increases will now slow ... Of course, consumer price inflation is still high, but significant further increases in the headline rate look unlikely," Capital Economics said in a note.
"We therefore believe that the balance of concern within government will shift to the growth outlook and that the People's Bank will call a halt to the tightening of monetary conditions ... in the second half of the year."
Copper's close below the 200-day moving average at about $8,760 a tonne on Wednesday is seen as a strong bearish signal.
Also in the spotlight are stocks of copper in LME warehouses, which at 467,725 stand nearly 35 percent above levels seen early in December and the highest since June last year. [0#LME-STOCKS]
LME stocks of aluminium at above 4.59 million tonnes are still within touching distance of the record high above 4.64 million tonnes hit in January 2010.
But prices for the metal used in transport, packaging and construction, have been supported by financing deals, which are estimated to have tied up about 70 percent of LME stocks.
An additional support for aluminium prices are power shortages in top producer China. Power is estimated to account for about 40 percent of aluminium smelting costs in China. [ID:nL3E7GB095] [ID:nLDE73C242]
"With the problem of power shortages spreading and worsening in parts of China, it is questionable if the strong production trends across base metals (especially aluminium and lead) can be sustained in coming months," Barclays Capital said in a note.
Aluminium CMAL3 traded at $2,614 a tonne from $2,611 a tonne, zinc CMZN3 at $2,144 from $2,160, lead CMPB3 at $2,277.50 from $2,295 and tin CMSN3 at $28,800 from $29,100.
Nickel CMNI earlier fell to $23,791 a tonne, it lowest since December 23 on worries about lower demand from stainless steel mills, which account for about two-thirds of global consumption. It traded at $24,218 a tonne from $24,550.
Metal Prices at 1410 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 390.55 0.00 +0.00 444.70 -12.18 LME Alum 2587.00 -24.00 -0.92 2470.00 4.74 LME Cu 0.00 -8700.00 -100.00 9600.00 -100.00 LME Lead 0.00 -2295.00 -100.00 2550.00 -100.00 LME Nickel 23950.00 -600.00 -2.44 24750.00 -3.23 LME Tin 28995.00 -605.00 -2.04 26900.00 7.79 LME Zinc 2142.00 -18.00 -0.83 2454.00 -12.71 SHFE Alu 16600.00 -100.00 -0.60 16840.00 -1.43 SHFE Cu* 64220.00 -2120.00 -3.20 71850.00 -10.62 SHFE Zin 16270.00 -480.00 -2.87 19475.00 -16.46 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Editing by Alison Birrane and Jane Baird)