* China manufacturing growth slows in April
* Copper inventories rise, at highest since last June
* Aluminium hits highest price since August 2008
(Updates with closing prices)
By Sue Thomas and Melanie Burton
LONDON, May 3 (Reuters) - Copper climbed off seven-week lows to end positive on Tuesday after better-than-expected U.S. factory orders underlined a recovery in the world's top economy, although a slowdown in Chinese growth curbed upside momentum.
Copper for three-month delivery on the London Metal Exchange (LME) ended at $9,350 a tonne. It earlier fell to a trough of $9,194.75 a tonne, compared with a close of $9,320 on Thursday before a long weekend that ended on Monday.
"There was a positive reaction," said analyst Andrey Kryuchenkov, "but at the end of the day, everybody is still looking at China, and weaker than expected PMI numbers (showing) manufacturing growth slowing in April outweigh it."
New orders received by U.S. factories climbed robustly in March, posting a fifth straight monthly gain that pointed to a healthy manufacturing sector that is supporting a continuing recovery, government data on Tuesday showed.
Manufacturing growth in China, the world's top consumer of base metals, slowed in April, a survey showed, suggesting that the government's tightening efforts have weighed on the world's second-largest economy more heavily than expected.
Although China's PMI for its services sector rose in April, the sub-index for the property sector, a major user of copper, remained below a 50 level that indicates expansion for the seventh month.
Matched with data from the U.S. on Monday that showed U.S. manufacturing growth continued in April but at a slightly slower pace, Citigroup said that copper's record high of $10,190 a tonne in February may prove the top of the cycle.
"PMIs reported over the past several days suggest that growth in global industrial production will continue to expand at a healthy rate over the next few months, but well off the pace recorded last year," Citi said in a note.
"The PMIs add to the case that suggests that, with China and other major countries now moving to withdraw very stimulatory macroeconomic policies, copper (most probably along with other base metals) has most likely seen its cycle price peak."
The dollar edged off three-year lows on Tuesday, as a build-up of bets to sell it based on loose U.S. monetary policy ran out of steam. A stronger dollar makes metals more expensive for holders of other currencies.
"Maybe we're looking at a potential inflection point where we could see some dollar strengthening over the next couple of months," Daniel Brebner, an analyst at Deutsche Bank, said.
"And with risk perceptions starting to build, the sell in May and go away mantra may become more popular given some of the challenges on the macro economic front that could emerge over the next couple of months."
Also weighing on prices, copper's inventories continue to rise, up by 150 tonnes to 463,800 tonnes, the highest level since last June.
HEADY PREMIUMS
Three month aluminium climbed to its highest since August 2008 at $2,803 a tonne before ending at $2,797 a tonne. While rising energy costs have helped to propel the power intensive metal to its highest levels in almost three years, climbing premiums also point to robust demand revival in South America, Barclays Capital said in a note.
"European aluminium premiums have both set new record highs of 8-9/¢lb and $210-235/t, respectively, with US premiums buoyed by strong South American demand due to weak smelter production growth in the region and rapid growth in demand," it said.
In exchange news, the London Metal Exchange is considering building its own clearing system, it said on Tuesday, a move market participants said could help it boost earnings although it would incur significant start up costs.
In other metals, tin ended at $32,300 from $32,050 while zinc, used in galvanizing, was $2,245 from $2,247 at Thursday's close.
Battery material lead finished at $2,509 from $2,491 and nickel was at $27,325 from $26,850.
Metal Prices at 1612 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 425.35 6.55 +1.56 334.65 27.10 LME Alum 2796.00 29.00 +1.05 2230.00 25.38 LME Cu 9350.00 30.00 +0.32 7375.00 26.78 LME Lead 2509.00 18.00 +0.72 2432.00 3.17 LME Nickel 27300.00 450.00 +1.68 18525.00 47.37 LME Tin 32295.00 245.00 +0.76 16950.00 90.53 LME Zinc 2240.00 -7.00 -0.31 2560.00 -12.50 SHFE Alu 16835.00 -15.00 -0.09 17160.00 -1.89 SHFE Cu* 69000.00 -200.00 -0.29 59900.00 15.19 SHFE Zin 17250.00 -70.00 -0.40 21195.00 -18.61 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07
(Editing by Anthony Barker)