* China steps up efforts to ward off growth slowdown
* Cash copper premium near $100, near widest in 2 years
* U.S. economy contracts in Q1 thanks to severe winter (Adds closing prices)
By Maytaal Angel
LONDON, May 29 Copper slipped on Thursday as investors were unnerved by China's latest efforts to ward off a sharp growth slowdown, but the metal was still near the previous session's three-month peak as global supplies grow ever tighter.
Three-month copper on the London Metal Exchange closed down 0.88 percent to $6,884 a tonne, after closing down 0.2 percent on Wednesday, when it reached its highest in nearly three months at $6,970 a tonne.
China, which consumes some 40 percent of the world's copper, has urged local governments to quicken the pace of budgetary spending to guarantee construction of major projects and boost the slowing economy.
Analysts at Nomura said the statement "shows the sense of urgency on the part of the government to boost growth".
But limiting losses in copper, London Metal Exchange stocks MCU-STOCKS were near their lowest in almost six years, while Shanghai Futures Exchange stocks were near their lowest in 2-1/2 years. CU-STX-SGH
Also cash or nearby LME copper contracts were trading at a premium of nearly $100 a tonne versus the three-month contract CMCU0-3, near the widest spread in more than two years.
"Premiums in China have eased off a little bit, suggesting demand has eased back. In the short term maybe this has an impact on sentiment, but at the end of the day clearly the market is very tight. You don't have $100 backwardation without the market being tight," said Wiktor Bielski, head of commodities research at VTB Capital.
Outside of China, the U.S. economy contracted in the first quarter for the first time in three years as it buckled under the weight of a severe winter, but there are signs activity has since rebounded.
Other data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to a strengthening labour market.
Nickel retreated on Thursday to reach its lowest since mid-May as investors closed positions following a price gain of almost 40 percent for the year so far. Still, the long-term bull trend in nickel remained intact, analysts said.
"Nickel is in the early stages of establishing a new higher trading range," Bielski said.
"It's going to be volatile within that ... (but) nickel pig iron production is falling much more than expected, the Indonesian ore ban is looking like its going to hold all of this into 2015, so the market is going to be moving into deficit, perhaps in the second half of this year."
Nickel closed down 2.17 percent at $18,900 a tonne, having earlier hit its lowest since mid-May at $18,742 a tonne.
Aluminium closed up 0.27 percent at $1,845 a tonne, while zinc closed down 0.29 percent at $2,068 a tonne, lead closed down 0.61 percent at $2,122 a tonne, and tin closed up 0.54 percent at $23,475 a tonne.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin ($1 = 6.2556 Chinese Yuan) (Additional reporting by Melanie Burton in Sydney; Editing by Jane Baird and Pravin Char)