METALS-Copper steady after China data, eyes 5th weekly loss

* Copper in longest weekly losing streak in two years
* Weak China PMI underscores further economic slowdown
* Coming Up: U.S. nonfarm payrolls; 1230 GMT

(Updates prices, adds comment, detail)
By Carrie Ho
SHANGHAI, June 1 (Reuters) - London copper steadied on
Friday as investors saw evidence of a further slowdown in top
consumer China setting the stage for more stimulus measures that
could buoy demand for the industrial metal.
Still, the latest weak China manufacturing data exacerbated
worries about a shaky global economy given a deepening debt
crisis in Europe and faltering U.S. recovery that is bound to
stretch copper's losing streak to a fifth week, the longest in
two years.
Surveys of China's vast factory sector showed momentum eased
in May, signalling a deeper-than-forecast deterioration in
demand at home and abroad and the likelihood of more policy
easing.
"What it does is it sets the scene for the government to act
to boost the economy given these softer data," said Graeme
Train, commodity analyst at Macquarie.
Three-month copper on the London Metal Exchange was
little changed at $7,428 a tonne by 0818 GMT, after falling to a
2012 low of $7,403 in the previous session. For the week, copper
is down 2.8 percent.
"The market had lowered its expectations of China's economic
performance in May over the past few sessions and had priced in
that pessimism along with fears over the euro zone," said CIFCO
analyst Zhou Jie.
Zhou said some investors had covered short positions after
recent steep falls in prices, although sentiment was still
cautious.
The most-active September copper contract on the Shanghai
Futures Exchange ticked down 0.4 percent to close at
54,330 yuan ($8,500) a tonne.

POLICY CUT
China consumes about 40 percent of the world's copper and
Friday's data may push Beijing towards further monetary policy
easing.
Australia and New Zealand Bank said in a note it was
expecting a 25 basis point cut in China's benchmark rates in
June, and is keeping its call for two more cuts in banks'
reserve requirement ratio for the remainder of the year.
"Therefore, we believe that further monetary policy easing,
plus faster implementation of the government's fiscal
commitments, will help arrest the decline in Chinese economic
activity and the economy will start to rebound strongly from
June onwards," ANZ said.
With the China data out of the way, focus turns to the U.S.
employment report expected to show nonfarm payrolls increased
150,000 in May from 115,000 in April, which was the fewest in
six months.
Market expectations are not so high ahead of the data with
private payroll growth accelerating only slightly in May and
claims for jobless benefits rose last week, suggesting the U.S.
labor market recovery was stalling after a strong performance
early in the year.
More bad news courtesy of the nonfarm payrolls could roil
markets anew, with no resolution in sight to the debt crisis in
Europe.
"We expect demand side issues to weigh on prices until
either something concrete is decided upon in Europe, stimulus
packages are announced, or production cutbacks are forthcoming,"
Fast Markets said in a note.
"In time we think all three will happen, but until then we
feel any rallies on the back of economic data are likely to be
short-lived and attract further selling.

Base metals prices at 0818 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 7428.00 3.00 +0.04 -2.26
SHFE CU FUT SEP2 54330 -200 -0.37 -1.86
HG COPPER JUL2 335.45 -1.10 -0.33 -2.37
LME Alum 1992.50 -2.50 -0.13 -1.36
SHFE AL FUT SEP2 15935 -30 -0.19 0.57
LME Zinc 1874.00 3.00 +0.16 1.57
SHFE ZN FUT SEP2 14770 -25 -0.17 -0.17
LME Nickel 16265.00 35.00 +0.22 -13.07
LME Lead 1919.00 -2.00 -0.10 -5.70
SHFE PB FUT 15080.00 35.00 +0.23 -1.34
LME Tin 19405.00 -195.00 -0.99 1.07
LME/Shanghai arb^ 755

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

($1 = 6.3690 Chinese yuan)

(Editing by Manolo Serapio Jr. and Robert Birsel)