* Chinese demand concerns drag copper down 2.4 pct in Q1
* LME copper stocks continue builds, compound demand worry
* Coming up: China manufacturing/U.S. jobs data Friday (Recasts, updates prices, market activity, adds second byline, dateline, previously LONDON)
By Chris Kelly and Rebekah Curtis
NEW YORK/LONDON, March 31 (Reuters) - Copper closed slightly higher on Thursday but ended the first quarter of 2011 with a 2.4 percent quarterly loss, its first such decline since the second quarter of 2010, as concerns about softer Chinese demand and rising warehouse stocks weighed on sentiment.
Traders cited book squaring and the weak dollar for Thursday's higher close. For the quarter, copper diverged from the broader base metals complex, with tin rallying 18.3 percent, aluminium up 7.2 percent, and lead and nickel each about 5 percent firmer.
Copper prices are off more than 7 percent from their record highs hit last month at $10,190 per tonne in London and $4.6575 per lb in New York. With sustained softness in Chinese buying and a buildup in London warehouse stocks, prices are expected to remain weak in the near-term.
"The Chinese market has hit a soft spot lately, reflected in the sharp fall of physical premiums and more metal delivered in LME and Shanghai warehouses," said Duncan Hobbs, an analyst at Macquarie.
"All these things reflect that the market is definitely soft at the moment."
London Metal Exchange (LME) copper for three-months delivery rose $49 for the day to end at $9,430 a tonne. For the quarter, that was down 2.4 percent from the final three months of 2010, its first quarterly loss since June.
COMEX May copper settled up 3.35 cents at $4.3075 per lb. It finished the quarter down 3 percent.
"We're still all wondering where is the Chinese buying that we were all looking for ... the fact is they have adequate supplies, so they can let the price come to them," said Frank Lesh, broker and futures analyst with Future Path Trading in Chicago.
High bonded stocks in China, estimated at about 600,000 tonnes, were seen discouraging fabricators from building copper stocks.
Compounding concerns about weak physical demand, stocks of copper have been on a steady ascent since December, rising 125 tonnes to their highest since July 2010, at 439,850 tonnes.
Base metals have been knocked this year by turmoil in the Middle East and North Africa, which has boosted oil prices and stoked inflation concerns, and by the earthquake, tsunami and nuclear disaster in Japan.
Aluminium firmed $16 to end at $2,645 a tonne. It has been underpinned by higher energy costs which lifted prices to a 2-1/2-year high of $2,656 earlier this week.
"In terms of supply and demand dynamics, Chinese output picked up earlier this year, as the government-imposed power restrictions were eased once again," Credit Suisse said of the metal in a note.
"However, supply growth is unlikely to match demand growth in our view. As a result inventories should fall, providing cyclical support for prices."
Zinc rose $24 to $2,362 a tonne.
Dowa Mining Holdings Co said it plans to resume operations of its 200,000 tonnes-a-year Akita zinc smelter in north-eastern Japan in early April.
The Akita plant is Japan's biggest zinc smelter, accounting for nearly 30 percent of Japan's total production. Nearly 65 percent of Japan's production capacity of zinc has been suspended since the March 11 earthquake. Metal Prices at 1945 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 430.15 2.75 +0.64 444.70 -3.27 LME Alum 2648.00 19.00 +0.72 2470.00 7.21 LME Cu 9427.00 46.00 +0.49 9600.00 -1.80 LME Lead 2694.00 9.00 +0.34 2550.00 5.65 LME Nickel 26090.00 60.00 +0.23 24750.00 5.41 LME Tin 31795.00 545.00 +1.74 26900.00 18.20 LME Zinc 2360.00 22.00 +0.94 2454.00 -3.83 SHFE Alu 16775.00 -60.00 -0.36 16840.00 -0.39 SHFE Cu* 70700.00 -600.00 -0.84 71850.00 -1.60 SHFE Zin 18240.00 -135.00 -0.73 19475.00 -6.34 ** 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 Pratima Desai in London; editing by William Hardy and David Gregorio)