METALS-Copper falls on demand concerns, China data

* Copper eases, but still supported around $3.83 per lb -
traders
* China Feb new export orders fall, PMI still below 50 -HSBC
* Euro zone PMIs suggest region may slide back to recession

By Harpreet Bhal and Josephine Mason
LONDON/NEW YORK, Feb 22 (Reuters) - Copper eased
slightly on Wednesday afternoon, losing some of the stellar
gains a day earlier, as the market reacted to weak export and
manufacturing data from top consumer China and uncertainty over
Greece's ability to implement tough reforms aimed at cutting its
debt.
Benchmark copper on the London Metal Exchange (LME)
settled at $8,435 a tonne in official rings, from Tuesday's
close of $8,449 a tonne. By the close in London though, the red
metal recovered some ground to $8,449 per tonne.
The key COMEX March contract inched slightly lower to
settle at $3.8335 per lb, down from $3.8365 in Tuesday's
settlement, but was trading slightly higher at $3.8445 per lb at
1419 EST (1918 GMT).
Technically, copper will find support around $3.83, the
200-day moving average level it pierced on Tuesday, although
buying momentum will need to pick up in earnest if prices are to
break above $3.9895, the five-month high copper hit on Feb. 9.
"Recent highs will be the upper end of the range for a
while," predicted Bill O'Neill, partner of LOGIC Advisors, who
is recommending investors stay neutral on copper for now.
"Yesterday we had risk-on mentality. Today is more pause,
reflective session," he said.
Even so, prices are up over 11 percent year-to-date driven
by short covering after the massive sell-off in November and
December when banks and funds liquidated and trading activity
fell as the market reeled from the collapse of MF Global.
The market had hoped demand from China - which consumes 40
percent of the world's copper - would pick up after the Lunar
New Year in January, but buying from the commodity consuming
giant has remained slack, raising worry that prices could
retreat sharply.
"Chinese's backing off. They didn't chase recent rally,"
said O'Neill, also pointing to stockpiles in Shanghai
warehouses, which hit their highest level in nearly a decade
last week, as a bearish sign.
Highlighting those concerns was preliminary data showing
China's new export orders shrank in February, compared with
expectations for a pick up after the holidays and a worrying
sign of the impact of the euro area debt crisis.
"The market has come off a bit after the manufacturing data
and the fact that China has cut the reserve ratio suggests they
are very concerned about the effects of the European debt
crisis," said VTB Capital analyst Andrey Kryuchenkov.
"We need to see whether a proper resolution has been found
for Greece and then the focus will shift on other countries such
as Italy, Portugal and Spain... It will take some time to see
how it goes," Kryuchenkov added.
While Greece's 130-billion euros financing deal helped ease
fears of an immediate default, the country's economic outlook
remained anything but rosy, a problem that could yet derail its
efforts to meet tough cost-cutting measures.

Adding to downbeat sentiment, the euro zone's service sector
shrank unexpectedly this month, reviving fears that the economy
risks sinking into recession, a business survey showed.

Goldman Sachs said it was lowering its 12-month commodity
returns forecast to 12 percent from 15 percent, saying key
commodities had rallied substantially heading into 2012.
"However, these returns continue to justify an overweight
allocation to commodities relative to other assets in a standard
portfolio," analysts at Goldman Sachs said.
The world's No. 3 copper mine, Chile's Collahuasi, resumed
mining operations after halting them following the death of a
worker, a spokeswoman said on Wednesday.

Aluminium finished at $2,280 a tonne from Tuesday's
close of $2,255 a tonne. Rio Tinto Alcan is asking
Japanese buyers to increase the premium they pay on primary
aluminium shipments to $132 per tonne for the April-June
quarter, two sources involved in informal talks between the two
sides said on Wednesday.
Zinc closed at $2,067 a tonne from Tuesday's close
of $2,028, while lead ended at $2,148.50 from $2,117 a
tonne.
Tin, finished at $24,050 from Tuesday's close of
$24,190 while nickel closed at $20,100 from $20,230.

Metal Prices at 1914 GMT

Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 384.30 0.65 +0.17 343.60 11.85
LME Alum 2280.00 25.00 +1.11 2020.00 12.87
LME Cu 8434.00 -15.00 -0.18 7600.00 10.97
LME Lead 2148.50 31.50 +1.49 2035.00 5.58
LME Nickel 20075.00 -155.00 -0.77 18710.00 7.30
LME Tin 24000.00 -190.00 -0.79 19200.00 25.00
LME Zinc 2066.00 38.00 +1.87 1845.00 11.98
SHFE Alu 16250.00 70.00 +0.43 15845.00 2.56
SHFE Cu* 60490.00 440.00 +0.73 55360.00 9.27
SHFE Zin 15825.00 45.00 +0.29 14795.00 6.96
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07