METALS-Copper steady; investment flows offset economy concerns

* New Year investment funds trickle into commodity sector

* China copper exports seen flat to lower for Dec

* Alcoa cautiously optimistic about aluminium demand

(Updates with closing prices) LONDON, Jan 9 (Reuters) - Copper closed flat on Wednesday as concerns about Europe and U.S. economies offset optimism about further recovery in the world's biggest metals consumer China and as investors earmarked New Year cash allocations for metals. Three-month copper on the London Metal Exchange ended unchanged at $8,080. The metal jumped to the highest levels in more than two months last week after a deal on the U.S. budget deficit, establishing a base above the $8,000 a tonne level after touching lows near $7,500 in November. Analyst Stephen Briggs at BNP Paribas in London said an uptick in risk appetite supported prices and that New Year investor allocations would likely continue to bolster the sector. "Generally more long-only money comes in to commodities at the beginning of the year and my sense is that's going to be still trickling in over the next week or two, so I'm biased to the upside," he said. This was balanced by some modest liquidations linked to the second day of commodity index re-weighting, he added. Morgan Stanley said in a note that the Dow Jones/UBS commodity index was shifting its weight towards precious metals from base metals. The DJ/UBS aluminium weighting fell to 4.9 percent from 5.9 percent and zinc declined to 2.5 percent from 3.4 percent. The market was also capped by worries about budget talks in the United States and an election in Italy. "Concerns over growth coming out of Europe and also the U.S is keeping a lid on prices moving higher," said Jonathan Barratt, chief executive of Sydney-based commodity research firm Barratt's Bulletin. Investors will closely eye December trade data from China, the world's biggest consumer of most commodities, due to be released on Thursday. Growth in China's vast manufacturing sector picked up in December, but copper imports were expected to fall as year-end demand dwindled while local output stayed strong.

ALCOA BOOST World shares got a boost after aluminium giant Alcoa reported fourth-quarter profit in line with Wall Street expectations. Alcoa expressed cautious optimism that demand for aluminium would continue to grow in 2013, helped in part by global growth in the aerospace and construction markets. The aluminium market has generated a cumulative surplus of nearly 9 million tonnes since 2008, according to Deutsche Bank estimates, as finance deals to store the metal and strong premiums have kept production churning out. "We expect the aluminium market to be in surplus by about 1.3 million tonnes in 2013, nevertheless we believe that the average price will be modestly higher year-on-year, a function of stronger physical demand conditions in the Western World," Deutsche said in a note. LME aluminium closed at $2,080 per tonne from $2,068 at the close on Tuesday. LME tin closed at $24,650 from $24,150 and nickel at $17,520 from $17,325. LME zinc closed at $2,017 from $2,020 and lead at $2,315 from $2,328.

Metal Prices at 1721 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T

Metal Last Change Pct Move End 2012 Ytd Pct

move

COMEX Cu 366.80 0.35 +0.10 365.25 0.42 LME Alum 2077.75 9.75 +0.47 2073.00 0.23 LME Cu 8076.75 -3.25 -0.04 7931.00 1.84 LME Lead 2318.25 13.25 +0.57 2330.00 -0.50 LME Nickel 17511.00 186.00 +1.07 17060.00 2.64 LME Tin 24400.00 250.00 +1.04 23400.00 4.27 LME Zinc 2020.75 -0.25 -0.01 2080.00 -2.85 SHFE Alu 15245.00 5.00 +0.03 15435.00 -1.23 SHFE Cu* 58160.00 20.00 +0.03 57690.00 0.81 SHFE Zin 15325.00 5.00 +0.03 15625.00 -1.92 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN

SHFE ZN began trading on 26/3/07

(Additional reporting by Melanie Burton; editing by James Jukwey)