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METALS-Copper gains on Asia, U.S. data; weak demand still a drag

* Lead top LME gainer, spreads flare, on worries of tightness

* Official China PMI climbs above 50 level first time since July

* U.S. private sector adds most jobs in 8 months

* U.S. consumer confidence highest in more than 4 years

LONDON, Nov 1 (Reuters) - Copper rose on Thursday, helped by data that showed a glimmer of renewed vigour in big metals consumer China, other Asian economies and the United States, but gains were tempered by concerns about demand and Europe's grinding debt crisis. Data over the past month has shown the health of the global economy remains fragile, with retail sales and the housing market pointing to an improvement in the United States but Europe is still struggling. In China, the world's largest consumer of copper, official and private sector factory surveys showed the economy is regaining some traction, adding to other signs of economic revival in October. ``We've had the slightly better PMI data which is no doubt helping metals lift off the lows we had earlier this week,'' said Citi analyst David Wilson. ``The lows we saw on Tuesday were good buying points and the data is probably being a little more supportive, but obviously there is still a sense of caution.'' Three-month copper on the London Metal Exchange closed 0.9 percent higher at $7,826 per tonne, the third day of gains. Copper hit a two-month low on Monday after shedding 9 percent since touching a peak of $8,422 on Sept. 19 following a burst of buying linked to central bank stimulus measures. So far this year, copper is up 4.6 percent. The market also was bolstered by signs of some improvement in the U.S. economy which added 158,000 jobs in October, data from a payrolls processor showed, far more than the 135,000 predicted in a Reuters poll. New jobless claims also dropped. U.S. consumer confidence rose in October to its highest in more than four years and The pace of growth in the U.S. manufacturing sector picked up modestly. While the data out of Asia and the United States is positive for metals, the complex has been wounded in recent weeks, RBC pointed out in a research note, and many investors are still on the sidelines after the devastation caused by Hurricane Sandy to swathes of the United States. ``So 'sell the rally' players are still likely to come in on any rally for the time being and the reduced liquidity will likely mean choppy trading conditions will persist for a few more days,'' RBC said.

TIGHTNESS IN LEAD Another worry is that Chinese copper buyers have not been stocking up as most of them have not seen a sustained improvement in their order books. An executive with a top copper tube and pipe maker in central China said his company still has not seen a pick-up in sales despite October being the start of the peak season. ``Orders have been slow since July. Our customers have been unwilling to stock up until they've got clearer policy signals after the 18th Communist Party Congress,'' he said, referring to China's once-in-a-decade leadership transition event scheduled to start on Nov. 8. A report by the International Wrought Copper Council saying the global market for refined copper is expected to swing into a 281,000 tonne surplus in 2013 from a deficit this year helped to cap price gains. However, some of China's home appliance makers have reported third-quarter profits due to a reviving property market. Lead was the biggest gainer on the LME as worries over supplies hit the market. Three-month lead surged 2.8 percent to close at $2,126.50 a tonne and the premium of cash metal over the three-month contract jumped to $14.50 a tonne, the highest in more than a year. ``A combination of higher scrap prices, rising premiums in the U.S., and the fact that much of the available LME on-warrant material is held at warehouse locations with long exit queues, looks to have boosted sentiment towards the metal,'' said analyst Leon Westgate at Standard Bank in London in a note. ``A likely surge in battery demand owing to the impact of Hurricane Sandy on parts of the U.S. east coast may also have given sentiment towards lead an additional short-term boost, though whether the Sandy effect is justified, or not, remains highly debateable.'' Three-month aluminium closed 1.8 percent higher at $1,940 per tonne. ``We continue to see risks in this market for as long as high cost production is subsidized, and excess supply is absorbed into lucrative inventory financing deals and reiterate our concern that prices could test lower towards $1,870 in the near term,'' ANZ said in a research note. Nickel added 1.0 percent to finish at $16,350 per tonne, zinc also rose 1.0 percent to $1,889 and tin climbed 2.3 percent to $20,375.

Metal Prices at 1706 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal Last Change Pct Move End 2011 Ytd Pct

move

COMEX Cu 354.90 3.15 +0.90 344.75 2.94 LME Alum 1941.50 35.50 +1.86 2020.00 -3.89 LME Cu 7820.75 61.25 +0.79 7600.00 2.90 LME Lead 2121.00 53.00 +2.56 2034.00 4.28 LME Nickel 16310.00 115.00 +0.71 18650.00 -12.55 LME Tin 20310.00 385.00 +1.93 19200.00 5.78 LME Zinc 1886.50 16.50 +0.88 1845.00 2.25 SHFE Alu 15335.00 -5.00 -0.03 15845.00 -3.22 SHFE Cu* 57070.00 250.00 +0.44 55360.00 3.09 SHFE Zin 14840.00 25.00 +0.17 14795.00 0.30 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN

SHFE ZN began trading on 26/3/07