METALS-Copper snaps losses on weak dollar, China caps gains

* China Feb HSBC flash PMI eases from two-year high

* China Jan copper imports fall 27.51 percent from last yr

* Investors watching Italian elections, Fed policy

LONDON, Feb 25 (Reuters) - Copper rose on Monday, following a six-day losing streak, as the dollar fell, although gains were kept in check by slower growth of manufacturing activity in top consumer China, where post-holiday buying has yet to emerge. Three-month copper on the London Metal Exchange rose to $7,866.25 a tonne at 1526 GMT, up 0.8 percent from a close of $7,805 on Friday when it posted a weekly loss of nearly 5 percent, its sharpest since mid-December, 2011. Copper remained in positive territory as traders saw fair value in the price following last week's sharp correction, and as a weaker dollar made dollar-priced metals cheaper for non-U.S. investors. But weighing on sentiment was data showing China's HSBC flash purchasing managers' index (PMI) for February slipped to a four-month low of 50.4 from January's final reading of 52.3. The flash PMI still indicated a fourth consecutive month of expansion. In addition, trade data showed imports of the metal into China, which consumes about 40 percent of the world's copper, reached just 243,174 tonnes in January, down 27.51 percent from a year ago. "The pullback we've seen is a realignment of prices to where fundamentals are but we are moving into a period where demand should start to pick up. A lot of factories in China are still closed. Some will start opening this week," said Barclays Capital analyst Gayle Berry. She added, however, that the market balance this year was a small surplus so any upside that could come over the next month from stronger demand would be capped by that better supply. Having pushed copper to a four-month high earlier this year, investors are now growing nervous again over euro zone debt, partly in light of an election in Italy, and about U.S. monetary policy and budget woes. Testimony on Tuesday from U.S. Fed Chairman Ben Bernanke may offer investors clues about when the Fed intends to rein in its ultra-loose monetary policy, but they still have to contend with the looming fiscal cliff. In a replay of tensions seen at the end of last year, the world's biggest economy faces automatic spending cuts in most government programmes on March 1 if Washington can't come up with a budget deal.

HOPES ON CHINA Traders expect physical purchases to pick up from this week as China's manufacturing sector returns to work after the Lunar New Year break. However, the seasonal upturn in demand may not necessarily push prices much higher. "There was quite a bit of misplaced expectations last week surrounding the return of the Chinese from their Lunar New Year Holidays, as hopes for a "welcome back" buying spree turned out to be as illusory as a pollution-free day in Beijing," said Ed Meir, analyst at INTL FCStone. Supporting sentiment, BlackRock Inc. has won approval from the U.S. securities regulator to list and trade its copper exchange-traded fund. This suggests extra demand for physical copper. Aluminium was at $2,042 a tonne, from a last bid of $2,048 on Friday. It earlier dropped to its lowest since mid-January at $2,029.25 a tonne under pressure from increasing output in China and continued technical selling. Soldering metal tin rose to $23,301 from $23,105 and zinc, used in galvanizing, climbed to $2,092 from $2,088. Battery material lead rose to $2,306 from $2,304 while stainless-steel ingredient nickel was at $16,702 from $16,940. Metal Prices at 1525 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 355.30 2.00 +0.57 365.25 -2.72 LME Alum 2043.00 -60.00 -2.85 2073.00 -1.45 LME Cu 7865.75 60.75 +0.78 7931.00 -0.82 LME Lead 2308.00 4.00 +0.17 2330.00 -0.94 LME Nickel 16702.00 -238.00 -1.40 17060.00 -2.10 LME Tin 23331.00 226.00 +0.98 23400.00 -0.29 LME Zinc 2094.00 6.00 +0.29 2080.00 0.67 SHFE Alu 14840.00 -110.00 -0.74 15435.00 -3.85 SHFE Cu* 57280.00 -340.00 -0.59 57690.00 -0.71 SHFE Zin 15550.00 -145.00 -0.92 15625.00 -0.48