METALS-Copper recovers as trade fears recede, aluminium hits near 8-month low

* LME/ShFE arb: http://bit.ly/2wZSAEz

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl (Adds closing prices)

LONDON, March 29 (Reuters) - Copper rose on Thursday on receding fears about a trade war but ended the quarter down 7 percent, while aluminium hit a near 8 month low on rising stocks and disappointment over China's winter output curbs.

Metals markets were shaken this month when U.S. President Donald Trump moved to impose tariffs on Chinese goods and Beijing threatened retaliation. But fears of a trade war have eased on hopes that negotiations can bring a compromise.

Aluminium remains particularly weak, however, with Shanghai inventories at record levels of nearly 1 million tonnes <AL-STX-SGH> and London Metal Exchange inventories at 1.29 million tonnes, up nearly 20 percent since early February <MAL-STOCKS>.

"I think the reaction to Trump's trade barriers is vastly overdone," said John Meyer, partner at broker SP Angel.

"There will be some token retaliation (but) China is going to continue to grow and the world will continue to consume a near similar amount of metal to before the tariffs, the metal will just be sourced from different places."

On aluminium, Meyer said that, while China's cuts often disappoint because it usually increases better quality production at the same time as cutting inefficient output, the latest deliveries onto the LME were the usual post Lunar New Year flows.

* COPPER: LME copper ended up 0.8 percent in at $6,714 a tonne. Prices this week fell to their weakest since early December and have lost 7 percent this quarter after double-digit growth for the past two years.

* HOLIDAY: The LME will be closed on Friday, March 30, and Monday, April 2, for the Easter holiday, with normal trade resuming on Tuesday.

* ALUMINIUM: LME aluminium ended down 1.1 percent at $2,005, its lowest since August last year at $1,996.

* JAPAN ON TARIFFS: Japan's aluminium industry on Thursday called for the United States to scrap import tariffs on aluminium, saying they were against international rules and posed a serious problem.

* CHINA CUTS: China's winter heating season ended on March 15 after Beijing ordered aluminium smelters in 28 of its smoggiest northern cities to cut output by 30 percent from mid-November to mid-March. However, the actual volume cut was below expectations, putting pressure on prices.

* CHINA GROWTH: Growth in China's manufacturing sector likely picked up slightly in March as authorities lifted winter industrial pollution restrictions and steel mills cranked up production as construction activity swings back into high gear.

* OTHER METALS: Zinc closed down 0.3 percent at $3,274, having hit its highest since early March, lead ended down 1.2 percent at $2,395, tin was last bid up 0.9 percent at $21,075, while nickel closed up 1.3 percent at $13,300.

(Additional reporting by Melanie Burton; Editing by Alexandra Hudson and Mark Potter)