METALS-Copper slips on higher mine output, subdued China demand

* BHP sees Escondida copper output up 20 pct in 2013

* Freeport expects 18 pct rise in copper sales this year

* Zinc, lead outperform after breaking through resistance

(Updates prices; adds detail, quotes) LONDON, Jan 23 (Reuters) - Copper fell on Wednesday, dragged lower by indications of a well-supplied market amid higher output from mining groups such as BHP Billiton and signs of subdued demand from top consumer China. Three month copper on the London Metal Exchange was at $8,115 a tonne at 1538 GMT, down 0.2 percent from Tuesday's close of $8,133 a tonne, slipping back from a 2-1/2 week high of $8,154.25 hit in intraday trade. BHP, the world's biggest mining group, released its quarterly report on Wednesday showing 5 percent higher copper output and forecast the world's biggest copper mine would step up production by a fifth this year. "Copper does seem to be struggling for any meaningful direction at the moment. Overhanging copper is this sense that supply generally is improving," said analyst David Wilson at Citigroup in London. "We're just now getting all the big miners' production results for Q4 and I suspect we'll see some pretty healthy gains across the board." On Tuesday, Freeport-McMoRan said it expected to increase consolidated copper sales this year by 18 percent to 4.3 billion pounds. Freeport runs Grasberg, the world's second biggest copper mine. "We anticipate a possible small surplus (in copper), but with stocks in firm hands, prices should be well supported at $7,850. Resistance at $8,350," Sucden said in a note. Copper hit its highest level in more than two months at $8,256.50 earlier in January following a deal by U.S lawmakers to avoid a "fiscal cliff" of spending cuts and tax increases. But prices have since retreated on fears the U.S. Federal Reserve may rein in easing measures sooner than expected and caution ahead of upcoming U.S. debt ceiling negotiations.

CHINA DATA Also weighing on the price was recent data from China which showed high domestic copper production and analysts estimate more than 1 million tonnes of copper are sitting in bonded warehouses in the world's biggest copper consumer. Chinese demand has been muted in recent weeks, with traders and analysts expecting buying to remain subdued until after the country's week-long Lunar New Year holiday in mid February. Attention is also on the scale of a revival in Chinese economic growth, with traders hoping HSBC's China flash purchasing manufacturer's index, due for release on Thursday, will provide fresh momentum. "It's possible in the very near term the China macro backdrop could continue to show further signs of stabilisation and that it could fuel positive sentiment," said Thomas Lam, chief economist at DMG & Partners Securities in Hong Kong. In other metals, benchmark zinc touched its highest levels in nearly three weeks at $2,095 after breaking above major resistance on Tuesday, traders said. It later traded at $2,082 a tonne, up from Tuesday's close of $2,053 a tonne. Lead also touched a near-three week high at $2,389 a tonne, before later trading at $2,371 a tonne, up from Tuesday's close of $2,325. Aluminium was at $2,088.75 a tonne, up from $2,075, after news that benchmark U.S. Midwest spot premiums reached a record high. A steep contango in the forward curve continued to attract and lock metal into warehouses, cutting availability on the spot market. Soldering material tin was at $24,500 from Tuesday's close of $24,625 while nickel was at $17,514 from $17,385.

Metal Prices at 1543 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 368.95 -0.75 -0.20 365.25 1.01 LME Alum 2088.50 13.50 +0.65 2073.00 0.75 LME Cu 8117.50 -15.50 -0.19 7931.00 2.35 LME Lead 2370.25 45.25 +1.95 2330.00 1.73 LME Nickel 17501.00 116.00 +0.67 17060.00 2.58 LME Tin 24535.00 -90.00 -0.37 23400.00 4.85 LME Zinc 2080.75 27.75 +1.35 2080.00 0.04 SHFE Alu 15255.00 -10.00 -0.07 15435.00 -1.17 SHFE Cu* 58590.00 -100.00 -0.17 57690.00 1.56 SHFE Zin 15545.00 60.00 +0.39 15625.00 -0.51

(Additional reporting by Melanie Burton in Singapore; editing