METALS-Copper falls after mixed U.S. data, higher stocks weigh

* Shanghai warehouse copper stocks up 2.9 pct

* U.S. industrial output rises, consumer sentiment tumbles

* China buys zinc, aluminum to support domestic prices

NEW YORK/LONDON, March 15 (Reuters) - Copper turned negative on Friday as risk-appetite waned after the release of mixed U.S. economic data, while rising stocks of the metal in China reinforced uncertainty about the outlook for demand.

Three-month copper on the London Metal Exchange fell 0.4 percent to $7,7772.75 a tonne by 1538 GMT, retreating from a session high of $7,850 hit earlier this session.

The metal, used in power and construction, is now trading about 2 percent lower in the year to date after falling more than 4 percent in February.

Data showed that U.S. industrial production rose more than expected in February on a rebound in manufacturing, signaling strength in the world's largest economy.

Optimism, however, was dampened by other U.S. reports showing a tumble in consumer sentiment in early March, the biggest increase in consumer prices in nearly four years in February, and slowing manufacturing growth in New York state.

"The numbers were so-so. We are seeing inconsistent reading: one step forward, one step back. It's not firing on all cylinders," said Edward Meir, analyst at INTL FCStone, underlining that lack of growth in Europe was also weighing on the outlook for base metals.

"And, if anything, fundamentals are getting worse. Copper stocks are rising, all the estimates now firmly show a surplus for this year, all these mines are reporting year-on-year output increases, which was unheard of a few years ago."

The high level of copper stocks was weighing on prices, with inventories in warehouses monitored by the Shanghai Futures Exchange rising 2.9 percent from last Friday, according to data from the exchange.

ShFE and LME copper stocks have climbed more than 200,000 tonnes, or more than a quarter of combined total stocks so far this year.

"I think eventually we could get to $7,500, which is a very important support. The Chinese may do some more buying if it gets there, but if it breaks below that level, copper could really look bad on the charts," Meir said.

CHINESE BUYING

China's state stockpiler bought 300,000 tonnes of aluminum and 45,000 tonnes of zinc in two closed-door tenders on Friday, smelter sources said, although the move is not expected to lift domestic prices of the metals dramatically.

China is the world's top consumer and producer of aluminum, whose domestic prices hover at nearly three-year lows, and zinc, whose prices at home stand near their lowest levels in four months. But the purchase is not expected to turn around China's aluminum market, which is currently oversupplied, the sources said.

Underlining the excess supply, aluminum stocks monitored by the Shanghai Futures Exchange rose 2.1 percent from a week ago, hitting a record 502,622 tonnes, data from the exchange showed.

"The Chinese purchases pose risks, as they keep producers artificially alive, and the already high supply surpluses remain in place or are actually increased. In the medium term, this could prevent any significant rise in prices," Commerzbank said in a note.

Benchmark aluminum fell 0.4 percent to $1,971 a tonne and nickel fell 0.8 percent to $17,089.

Tin traded at $23,900 a tonne, down 0.1 percent; zinc at $1,966, down 0.5 percent; and lead at $2,229, down 0.9 percent.