METALS-Copper pressured by weak euro, Chinese demand uncertainty

* Euro retreats vs dollar
* Chinese physical demand for metals still slow
* Copper down 2 pct in October

(Updates with closing prices)
By Harpreet Bhal and Silvia Antonioli
LONDON, Oct 19 (Reuters) - Copper slipped on Friday, hurt by a weak euro on
concerns about the euro zone debt crisis and uncertainty about the outlook for
demand from top user China.
Three-month copper on the London Metal Exchange (LME) closed at
$8,015 a tonne in official rings, down 2.5 percent from the previous close at
$8,220.
The dollar rose against the euro as a perceived lack of progress on a
Spanish bailout request reminded investors of the headwinds facing the global
economy.
A strong dollar makes commodities priced in the U.S. unit more expensive for
holders of other currencies.
Volumes, however, remained thin as LME Week - an annual gathering in London
of the industrial metals industry - draws to a close.
Copper prices rallied nearly 8 percent in September, fuelled by the third
round of quantitative easing (QE) by the U.S. Federal Reserve, the promise of
bond buying by the European Central Bank (ECB) and stimulus measures in Japan
and China.
The metal used in power and construction though, is down 2 percent since the
beginning of in October.
"We had a big rally in base metal prices going into September on
anticipation of QE3, the implementation of QE3 and also the raft of policy
initiatives announced in China and measures taken by the ECB," said Nic Brown,
head of commodities research at Natixis.
"Just don't expect this surge in prices to be sustainable. It was not a real
reflection of improved demand in China and it is no surprise to us that base
metals prices have come off quite significantly."
Investors' attention has turned to consumer demand in China, which devours
as much as 40 percent of the world's refined copper, and by how much its economy
might recover in the fourth quarter.
Many economists believe a rebound in China's economy in the fourth quarter
is likely to be mild, with the country's Commerce Ministry warning that a
recovery trend in exports was not confirmed, despite a surge in
September.
The tepid recovery that analysts expect was also underlined by China's
foreign direct investment data, which showed inflows falling 3.8 percent in the
first nine months from a year earlier. That extended the longest run of declines
since the depths of the global financial crisis.
In the euro zone, leaders took a stride towards establishing a single
banking supervisor for the region next year, paving the way for the bloc's
rescue fund to inject capital directly into ailing banks.

DEMAND EYED
In the physical markets, Chinese spot copper was trading at a discount to
the ShFE front-month contract of up to 200 yuan, indicating slow spot demand.

"Chinese copper trading activity has ticked up from before the Oct. 1
National Day holiday but consumer demand remains sluggish overall," said Yang
Changhua, an analyst from China's state-backed research firm Antaike.
"We believe demand will improve a bit in the fourth quarter, but prices
won't cross above $8,800."
In other metals, LME aluminium, untraded in official rings, was last
bid at $1,970 versus Thursday's close of $2,015. Benchmark lead changed
hands at $2,115 versus a close of $2,157 on Thursday.
Tin traded at $21,275 from $21,775 while zinc changed hands
at $1,885 from Thursday's close of $1,921.
Nickel traded $16,955 from Thursday's close of $17,320.

Metal Prices at 1612 GMT

Metal Last Change Pct Move End 2009 Ytd Pct
move
VALUE
LME Alum 1970.00 -45.00 -2.23 2230.00 -11.66
LME Cu 8015.00 -205.00 -2.49 7375.00 8.68
LME Lead 2114.50 -42.50 -1.97 2432.00 -13.06
LME Nickel 16950.00 -370.00 -2.14 18525.00 -8.50
LME Tin 21275.00 -500.00 -2.30 16950.00 25.52
LME Zinc 1884.00 -37.00 -1.93 2560.00 -26.41
SHFE Alu 15515.00 -35.00 -0.23 17160.00 -9.59
SHFE Cu* 58460.00 -670.00 -1.13 59900.00 -2.40
SHFE Zin 15065.00 -145.00 -0.95 21195.00 -28.92
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07

(Additional reporting by Carrie Ho in Shanghai; editing by James Jukwey)