METALS-Copper steady as global macro signals improve

* Copper held back by weak physical demand from China

* U.S. debt ceiling impasse thaws; Europe shares rally

* China cold snap drives lead battery demand - Deutsche

LONDON, Jan 21 (Reuters) - Copper was little changed on Monday as a political attempt to break a budget impasse in the United States revived risk appetite, but was offset by still weak physical demand from top consumer China.

U.S. House Republican leaders said Friday they would seek to pass a three-month extension of federal borrowing authority in the coming days to buy time for the Democrat-controlled Senate to pass a plan to shrink budget deficits.

European shares, seen by some as a proxy for growth, inched towards two-year highs in response on Monday, but investors were more cautious about betting copper to new highs given Chinese physical metal buying remains weak.

Data out earlier showed imports of refined copper by China, which consumes some 40 percent of the world's supplies of the metal, dropped 4.7 percent in December from November, though they were up 20 percent for 2012 as a whole.

"On the macro side base metals have even in the short term a bullish scenario, what is holding them back is actually the physical market. Many people say we have to wait until after the Chinese new year and probably they're right," said Gianclaudio Torlizzi, partner at metals consultancy T-Commodity.

"I'm not that worried about the general level of stocks (in China) because there's big question marks about availability of these stocks," he added.

Three-month copper on the London Metal Exchange edged down 0.08 percent at $8,054.50 a tonne by 1020 GMT. It hit a one-week high of $8,130 a tonne in the previous session before closing the week more-or-less unchanged.

China's Lunar New Year holiday begins Feb. 11, while markets will reopen on Feb. 18. U.S. markets will be shut on Monday for Martin Luther King day, draining liquidity from the market.

After strengthening to 2-1/2-month highs near $8,250 a tonne at the beginning of the year, copper prices have struggled to find momentum and last week touched a 2013 trough at $7,920 a tonne.

WAITING FOR THE CHINESE NEW YEAR

Reflecting diminished appetite for metals from investors, hedge funds and money managers cut bullish bets in copper in the week to Jan. 15, Commodity Futures Trading Commission data showed on Friday.

On the plus-side though, investors remain mindful that China's economy picked up steam in the fourth quarter, data showed last week, as infrastructure spending and a jump in trade signalled the foundation for a stable growth path.

"We still like the base metals and are looking for higher prices in Q1, but we may have to wait until after the Chinese New Year holidays in February for a decent rally to materialise now," said RBC Capital in a research note.

In other metals traded, lead fell 0.13 percent to $2,298 a tonne, down nearly 2 percent on the year, though Deutsche Bank said a severe cold snap in China could fuel a resurgence in demand for the metal used in battery making.

"We believe that the lead market could be one of the more attractive long opportunities this year. We would recommend buying on weakness," it said.

Soldering metal tin, the best base metals performer last year, fell 0.10 percent to $24,999 a tonne

"Tin has continued its march upwards, although having risen 30 percent from the low of late October, it has lost a little momentum. After such large gains, a correction is possible, even likely. The LME-Shanghai arbitrage still does not favour Chinese exports but it is getting closer," said BNP Paribas in a note.

Zinc, used in galvanizing, edged up 0.10 percent to $2,036 a tonne, aluminium dipped 0.06 percent to $2,042.75 a tonne, while stainless-steel ingredient nickel , the worst performer on the LME last year, fell 0.28 percent to $17,501.

Barclays said in a note that nickel prices are set to continue trending lower, weighed down by an increase in nickel pig iron, the lower nickel content substitute used by China increasingly in lower grades of stainless steel.

The banks forecast NPI production rising to 300,000 tonnes this year from 265,000 in 2012.