METALS-LME copper slips on slow China demand, EU debt woes

* Front month Shanghai copper at discount to April contract
* Discount flags lack of nearby demand
* Coming Up: U.S. initial jobless claims; 1330 GMT

(Updates prices)
By Melanie Burton and Jane Lee
SHANGHAI, Feb 2 (Reuters) - London copper slipped on
Thursday as gains in the past month kept Chinese buyers at bay
and the euro zone debt crisis continued to weigh on sentiment,
but upbeat global manufacturing data is expected to keep a floor
under prices.
Three-month copper on the London Metal Exchange
inched down 0.3 percent to $8,416.75 a tonne by 0822
GMT, after gaining about 1 percent in the previous session. The
metal rose 9.5 percent in January, its biggest monthly increase
in three.
The most-traded April copper contract on the Shanghai
Futures Exchange was up 0.64 percent to 59,880 yuan
($9,500) a tonne.
Factory activity rose in China, the United States and
Germany in January, and the three manufacturing superpowers
drove gains in global output even as Europe struggles with the
fallout from its festering debt crisis.
"The market is digesting the supportive PMI numbers, which
have confirmed that industrial activity looks considerably
better compared to Q4 last year, but there's some uncertainty,
especially over the funding stress in Europe," said Stefan
Graber, a Credit Suisse Private Banking analyst based in
Singapore.
"In China indicators tell us that physical demand is not
pointing towards strengthening. A positive U.S. payrolls number
on Friday to follow up on the PMI figures could line us up for a
good week, but some retracement or at least consolidation for
metals looks more likely."
Front-month Shanghai copper was traded at a 700 yuan
discount against the April contract, from a premium
during August to December, flagging a lack of nearby appetite
for metal.
Higher London prices against Shanghai were also discouraging
imports, suggesting that Chinese buyers were not eager to make
purchases at these levels.
"After the holiday, the domestic spot market is not very
active because lots of plants should get back to work after next
Monday, the end of Chinese spring festival on the Lunar
calendar," a trader at a Chinese merchant said.
"The discount on the spot market continues."
Elsewhere, traders seeing weak appetite from top consumer
China questioned the bullish credentials of falling LME copper
stocks in the United States.
Underpinning the metals, the dollar lost ground against the
euro and commodity currencies as risk sentiment improved after a
batch of manufacturing data from China to Germany allayed the
market's worst fears about global growth.
A weaker dollar makes commodities less expensive for holders
of other currencies.
In cooling news for lead demand, North American shipments of
replacement automotive batteries slipped by 2.2 percent in
December from November, and dropped 6.3 percent from December
2010, a U.S. industry group said.

Base metals prices at 0822 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8416.75 -23.25 -0.28 10.75
SHFE CU FUT APR2 59880 380 +0.64 8.16
HG COPPER MAR2 382.40 -1.80 -0.47 11.29
LME Alum 2267.50 2.50 +0.11 12.25
SHFE AL FUT APR2 16270 55 +0.34 2.68
LME Zinc 2126.00 -5.00 -0.23 15.23
SHFE ZN FUT APR2 15945 170 +1.08 7.77
LME Nickel 21200.00 225.00 +1.07 13.31
LME Lead 2230.00 -5.00 -0.22 9.58
SHFE PB FUT 16125.00 130.00 +0.81 5.50
LME Tin 24250.00 95.00 +0.39 26.30
LME/Shanghai arb^ 2183

Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus
SHFE third month

(Editing by Himani Sarkar)