METALS-LME copper gains on Fed stimulus hopes, China revival

* Japan buyers pay Q1 premium of $240 in aluminium deals with Rio Tinto

* More U.S. stimulus may be priced into the market

* Coming Up: Federal Reserve decision 1730 GMT, news conference 1915 GMT

(Adds details, quotes; previous SINGAPORE) LONDON, Dec 12 (Reuters) - Copper prices rose slightly on Wednesday and were near two-month highs on hopes of more U.S. monetary easing and more signs of an economic pick-up in China, the biggest metals consumer. Three-month copper on the London Metal Exchange, rebounding from a dip the previous session, rose 0.4 percent to $8,134.75 per tonne by 1038 GMT. But worries about the U.S. fiscal cliff talks on potential tax hikes and spending cuts capped gains as negotiators failed to make much headway.

Also dampening sentiment was more bad news from the euro zone, where data showed that output from factories continued their steep fall. Copper, which has shot up about 7 percent over the past month in a year-end rally, got support from expectations that the Federal Reserve meeting on Wednesday would announce further monetary easing. Markets, however, may not get any further boost when the news is released, analyst Nic Brown at Natixis said. "I would expect a continuation of the purchases that have been going on under Operation Twist, but it does rather suggest that much of that is already in the market. I don't think that's going to be a surprise to anybody." More supportive for metals markets has been an economic revival in China, which accounts for about 40 percent of global copper demand, he added. "It does very much appear that the efforts to put some of these stimulus policies in place are clearly on the way ... it's clear that there's going to be a healthy quantity of infrastructure investment." Copper prices are up more than 6 percent this year and within reach of almost two-month highs at $8,159 hit on Monday. The most-traded March copper contract on the Shanghai Futures Exchange rose 0.14 percent to close at 57,980 yuan ($9,300) a tonne.

ALUMINIUM PREMIUMS DROP Japanese buyers have agreed on an aluminium premium for some January-March shipments of $240 per tonne with Rio Tinto Alcan, down from a record <PREM-ALUM-JP> in the previous quarter, three sources directly involved in the talks said. UBS said it trimmed its 2012 and 2013 price forecasts for aluminium by 2 percent and 1 percent, respectively, to emphasize its weak fundamentals. "Persistent lack of producer discipline worldwide - inadequate cuts in face of price weakness - weighs on the short- to medium-term forecast," UBS said in a note. A recovering U.S. economy, however, was a key upside risk since this could spur auto and consumer packaging demand. Three-month aluminium climbed 0.8 percent to $2,132.25 per tonne, coming close to a near three-month high of $2,142 touched on Tuesday. UBS said nickel was its least favoured base metal. "Supply growth remains an issue for the market, as projects continue to ramp-up ... Although 2013 is likely to be an over supplied market, the surplus should be smaller than 2012," the note said. LME benchmark nickel, mainly used in stainless steel, added 0.5 percent to $17,887 per tonne. Battery material lead edged up 0.1 percent to $2,300 per tonne, coming closer to a 2012 high of $2,329. Inventories of the metal in warehouses monitored by the LME fell by a further 1,975 tonnes to 350,925 tonnes. Zinc gained 0.4 percent to $2,089 per tonne and tin rose 0.4 percent to $23,050. Metal Prices at 1048 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 369.90 2.25 +0.61 344.75 7.30 LME Alum 2131.50 15.50 +0.73 2020.00 5.52 LME Cu 8132.50 29.50 +0.36 7600.00 7.01 LME Lead 2300.75 3.75 +0.16 2034.00 13.11 LME Nickel 17890.00 90.00 +0.51 18650.00 -4.08 LME Tin 23050.00 80.00 +0.35 19200.00 20.05 LME Zinc 2089.00 9.00 +0.43 1845.00 13.22 SHFE Alu 15285.00 5.00 +0.03 15845.00 -3.53 SHFE Cu* 57900.00 50.00 +0.09 55360.00 4.59 SHFE Zin 15445.00 5.00 +0.03 14795.00 4.39 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN

SHFE ZN began trading on 26/3/07 ($1=6.2460 Chinese yuan)

(Additional reporting by Melanie Burton; editing by Jane Baird)