* China Q4 2009 GDP up 10.7 pct on year, Dec CPI up 1.9 pct * China Dec copper output 418,000 T, slightly lower on month * China Dec trade breakdown to be released after market (Updates prices; recasts; adds comment) By Rujun Shen and Jacqueline Wong SHANGHAI, Jan 21 (Reuters) - Copper rallied 1.5 percent on Thursday, after data showed China's economic growth accelerated in the last quarter of the year, offsetting worries over further tightening of China's monetary policy. China's economy finished 2009 with a flourish, as a 10.7 percent annual increase in fourth-quarter GDP took full-year growth to 8.7 percent, easily surpassing Beijing's 8 percent target. [ID:nTOE60K011] "Obviously the month-on-month growth momentum is very strong," said Xing Ziqiang, an economist at CICC in Beijing. "So I think the chances for us to see an interest rate rise in the first quarter are increasing." An acceleration in consumer inflation to 1.9 percent in the 12 months to December from November's 0.6 percent figure is likely to reinforce worries about possible economic overheating on the back of a renewed surge in bank lending. "I think it's bad news for base metals, and copper in particular. Fixed asset investment is lower, and inflation higher, which basically means demand is down and inflation is up," said a trader based in Singapore. "Rate hiking and currency appreciation have to come quicker." In another gesture towards tightening liquidity, China's central bank raised the yield again on its three-month bills in its regular open market operations on Thursday. [ID:nBJD003433] But the nervousness over tightening gradually eased during the day, as Shanghai copper regained some ground and London copper moved higher. "Investors are less worried now, as the data were not wildly out of expectations. The panic sentiment in the market has ebbed, especially after yesterday's fall," said Liu Xu, an analyst at China International Futures. On Wednesday official media and sources said some banks had been told to restrict lending for the rest of January after a burst of credit in early 2010, triggering fears on tighter monetary policy. Shanghai's benchmark third-month futures contract was almost unchanged at 60,950 yuan a tonne, after touching an intra-day of 58,380 yuan a tonne. The most-active contract for May delivery SCFK0 shed 30 yuan to 60,970 yuan. Three-month copper on the London Metal Exchange CMCU3 gained 1.5 percent to $7,488 a tonne by 0701 GMT, reversing from losses in the previous session. Analysts expected copper prices to move sideways in the short term, as investors are worried about more tightening moves from China, which could drain liquidity in the market and depress investment buying. China's production of refined copper fell 0.6 percent in December from November's record, due to repairs at top producer Jiangxi Copper (600362.SS: Quote, Profile, Research) (0358.HK: Quote, Profile, Research). Production of primary aluminium rose 1 percent on the month in December and hit a record for the third straight month.[ID:nTOE60K03D] The euro hit a five-month low on the dollar on Thursday, as its sell-off on chart triggers and fiscal worries extended, while the Australian dollar held its ground as Chinese growth quickened but the risk of tighter policy also grew. [USD/] China has delayed the release of detailed December trade data to after the market closes on Thursday. [ID:nTOE60K00M] Base metals prices at 0701 GMT Metal Last Change Pct Move End 2009 YTD pct chg LME Cu 7488.00 113.00 +1.53 7375.00 1.53 SHFE Cu* 60950.00 -50.00 -0.08 59900.00 1.75 LME Alum 2278.00 11.00 +0.49 2230.00 2.15 SHFE Alum* 17465.00 55.00 +0.32 17160.00 1.78 COMEX Cu** 334.60 -9.10 -2.65 332.75 0.56 LME Zinc 2492.00 48.00 +1.96 2560.00 -2.66 SHFE Zinc 20730.00 -65.00 -0.31 21195.00 -2.19 LME Nickel 19100.00 295.00 +1.57 18525.00 3.10 LME Lead 2341.00 46.00 +2.00 2432.00 -3.74 LME Tin 18150.00 375.00 +2.11 16950.00 7.08 LME/Shanghai arb^ -1146 Dollar/yuan 6.8262 \ 6.8272 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Editing by Clarence Fernandez)

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