METALS-Copper steady on China return, wary on U.S. standoff
* China returns from holiday on Tuesday Oct. 8
* Possible shutdown of Indonesia's Grasberg copper mine
* Industry event LME week starts on Monday in London
(Recasts, adds comment, detail, updates prices)
LONDON, Oct 4 (Reuters) - Copper was little moved on Friday as it awaited the return from holiday of top consumer China, although investors kept a close eye on the spectre of U.S. default due on October 17 after the metal dropped in the previous session.
The U.S. government shutdown appeared likely to drag on for another week and possibly longer, as the crucial debt ceiling showdown approaches.
Volumes of the red metal were thin and the three-month benchmark contract changed little, up 0.1 percent at $7,193 a tonne by 0907 GMT, after losses from the previous session when it fell 1.2 percent.
"For us the market you have to look at is China. That is the most important market in terms of base metals demand," said Nic Brown, head of commodities research at Natixis.
"We think the situation in China is getting better."
The dollar wallowed near an eight-month low, weighed down by the U.S. deadlock, although for most a default remains unthinkable.
"The market is taking the view that shutting the government down is one thing, but they're unlikely to go as far as triggering a default," said Brown.
A weakening greenback supports prices, as it is cheaper for importing nations to buy dollar-priced commodities with their currency.
China's September manufacturing PMI figures disappointed investors, but other signs pointed to solid growth. Electricity consumption, which is closely correlated with manufacturing, grew 14 percent year-on-year in August.
However investors were jittery about Indonesia, home to Grasberg, the world's second-biggest copper mine, which could be forced to shut down next year over the country's ban of unprocessed mineral ores.
Indonesia has attempted to increase influence and profits and encourage local investment from metals companies, but the market remains unconvinced.
China's Minmetals has submitted a first-round bid for Glencore-Xstrata's $5.9 billion Las Bambas copper mine in Peru, the managing director of the state-owned metals and mining company said.
The metals industry will descend on London for next week's industry LME week, where term deals for 2014 in copper are expected to be hammered out.
Benchmark aluminium eased 0.25 percent to $1,823 a tonne, with zinc flat at $1,868.
Lead softened by 0.2 percent to $2,056, tin rose 0.6 percent to $22,880 and nickel was up 0.6 percent to $13,604.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
(Additional reporting by Melanie Burton in Singapore, editing by William Hardy)