UPDATE 1-METALS-London copper drifts on lack of progress in U.S. debt talks
* Chinese copper imports hit 18-month high in Sept
Oz Minerals cuts 2013 copper production forecast
* Coming Up: Euro zone Industrial production at 0900 GMT
(Adds comment, detail, updates prices)
By Melanie Burton
SINGAPORE, Oct 14 (Reuters) - London copper edged lower on Monday due to worries about the United States' fiscal deadlock and disappointing Chinese export data, but prices were given some support by healthy copper imports into China last month.
Dampening risk appetite was the absence of a resolution to the U.S. debt crisis, despite promising signals on progress late last week, while trade data at the weekend showed China's export growth fizzled out in September with a fall in sales to Southeast Asia.
However, copper imports by China, the world's top consumer of the metal, reversed a fall in August to jump 18 percent in September.
"Lower China exports were not surprising given what we know is happening in the world," said analyst Joel Crane of Morgan Stanley in Melbourne.
"Going forward, it does feel like the copper restocking cycle is maturing. I'd expect imports to ease in October because of the holiday but even with fairly weak external demand I don't think they're going to drop off a cliff, especially because regional inventory is low," he added.
Morgan Stanley sees copper trading at an average of $7,165 a tonne in the fourth quarter, in part due to lower available supply.
Three-month copper on the London Metal Exchange inched down 0.2 percent to $7,185.75 a tonne as of 0322 GMT, paring early losses of around 0.7 percent.
Copper prices closed last week down nearly 1 percent, the biggest weekly loss since mid-September.
The most traded January copper contract on the Shanghai Futures Exchange also cut early losses to trade up 0.2 percent at 51,800 yuan ($8,500).
In the United States, Senate negotiations to bring the fiscal crisis to an end showed signs of progress on Sunday, but there were no guarantees that the U.S. federal government shutdown was about to end or that an historic default would be avoided.
Oz Minerals cut its 2013 copper production target for the second time this year due to mine repair work, trimming its 2013 forecast by around 12,000 tonnes to between 70,000 and 75,000 tonnes of copper contained in concentrate.
The International Copper Study Group (ICSG) said last month that the global copper market in June showed a 132,000 tonne deficit, helped by demand from China, which reached its highest monthly level in 1-1/2 years.
At last week's industry LME week in London, the focus in nickel was on a looming export ban by Indonesia of laterite ore that would ultimately raise costs for Chinese producers by around $3,000 a tonne from $12,500 currently, supporting LME prices, Barclays said in a note.
"General sentiment towards nickel was constructive on price prospects, due in part to the risks associated with the Indonesia export ban but also to the increased evidence of supply rationing ex-China given significant margin pressures at current LME prices levels," it said.
Poor nickel prices have encouraged Glencore Xstrata and Vale to revive talks over a potential combination of their nickel operations in Canada's Sudbury basin in an effort to cut costs as prices for the metal languish, sources said.
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
($1 = 6.1206 Chinese yuan)
(Reporting by Melanie Burton; Editing by Alan Raybould)