METALS-Copper slips on global growth worries; China PMI weighs

* China official PMI rises to 49.8 in Sept from 49.2 in Aug
* China markets closed this week for holidays
* Coming up; euro zone Markit Manufacturing PMI at 0758 GMT

(Adds quotes, detail; updates prices)
By Melanie Burton
SINGAPORE, Oct 1 (Reuters) - London copper eased on Monday
on persistent worries over global economic growth after two
indicators showed China's factory sector is still shrinking,
while concerns over Spain's banks and prospects for a bailout
curbed appetite for risk.
Asia's manufacturers are continuing to struggle in the face
of tepid demand from the United States and Europe, according to
business surveys and data releases on Monday that underlined the
fragility of the global economy.
China's economy offered more evidence of a seventh straight
quarter of slowing growth on Monday, with an official survey of
factory managers remaining in contractionary territory for a
second successive month.
This followed on from a private sector China PMI survey
published on Saturday which pointed to a month in which a slide
in the rate of economic growth was halted but not reversed.

China is the world's top consumer of most metals, accounting
for 40 percent of refined copper demand last year.
"The PMIs do confirm our view that Chinese policy has really
failed to gee-up the economy significantly, and we still see a
need for more RRR cuts," said Nick Trevethan, a Singapore-based
commodities strategist at ANZ, referring to the country's
reserve requirement ratio.
"On copper we see the downside limited to around $7,800, but
later in the year we would expect to see prices rise again as
the market starts to price in an improving demand outlook in Q1
and Q2 -- maybe $8,400 by the end of the year -- but we don't
expect any fireworks."
Three-month copper on the London Metal Exchange
slipped 0.41 percent to $8,171.50 a tonne by 0704 GMT, reversing
a small advance seen the previous session.
LME copper ended the third quarter steady from the second,
despite a raft of easing measures unleashed by the U.S. Federal
Reserve and the European Central Bank, as well as targeted
fine-tuning by China.
Prices, down by more than 12 percent in June, have rallied
to post gains of nearly 8 percent this year, however.
More data due to be released later on Monday is expected to
confirm that the euro zone is mired in recession while the
prospects of a firmer U.S. recovery remain delicately balanced.

The Shanghai Futures Exchange is closed this week for a
national holiday.
Adding to headwinds for metals, the euro fell to a
three-week low in on Monday, after an independent audit of
Spain's banks failed to quell concerns about the country's
progress towards a bailout needed to shore up its public
finances.
A stronger dollar makes commodities priced in the greenback
more expensive for holders of other currencies.
Still, a physical trader in Singapore said there were small
amounts of speculative buying of copper, although the holidays
in China and the weaker euro were signalling early losses into
the European time zone.
Expectation of lower demand from China have led Codelco,
the world's No.1 copper producer, to seek to reduce 2013
physical copper premiums to Asian buyers by about $5, while its
European rate will likely be held or trimmed by a smaller
amount, a source linked to the company told Reuters.

Meanwhile, miner Xstrata gave its long-awaited
blessing to trader Glencore's revised $33 billion offer
on Monday, though only on condition shareholders also support a
controversial pay package aimed at retaining key managers for at
least two years.

PRICES

Base metals prices at 0704 GMT
Metal Last Change Pct Move YTD pct chg
LME Cu 8171.50 -33.50 -0.41 7.52
SHFE CU FUT JAN3 -- -- -- --
HG COPPER DEC2 372.90 -2.90 -0.77 8.53
LME Alum 2083.00 -30.00 -1.42 3.12
SHFE AL FUT JAN3 -- -- -- --
LME Zinc 2059.00 -37.00 -1.77 11.60
SHFE ZN FUT JAN3 -- -- -- --
LME Nickel 18271.00 -204.00 -1.10 -2.35
LME Lead 2240.00 -40.00 -1.75 10.07
SHFE PB FUT -- -- -- --
LME Tin 21550.00 -255.00 -1.17 12.24
LME/Shanghai arb^ --

Shanghai and COMEX contracts show most active months

(Reporting by Melanie Burton; Editing by Joseph Radford and
Miral Fahmy)