* Fed official says tapering still on table for Dec meet
* Euro zone factory output disappoints
* BHP says nickel output will be hit by earthquake
(Updates with closing prices)
LONDON, Nov 13 (Reuters) - Copper tumbled to its lowest level in three months on Wednesday after a U.S. Federal Reserve official raised the prospect of a retreat from monetary stimulus next month and a Chinese policy meeting disappointed investors.
A looming surplus in copper, a stronger dollar and concern about European recovery also weighed on metals markets.
"The last 24 hours trading in copper has been quite pivotal. We've a very active day - by 7 a.m., we had about three times the usual volume. People are coming out of the woodwork," said Vicky Sanders, head of analytics sales at broker Marex Spectron in London.
Three-month copper on the London Metal Exchange closed down 2 percent at $6,980 a tonne, after touching a low of $6,956, the weakest since Aug. 7.
Copper extended losses from the previous session when it broke through its 100-day moving average of $7,118.
The move lower sent copper crashing through the floor of a $7,000 to $7,420 range it had held since early August.
"According to our positioning data, we already had a small short in copper, so it's not longs liquidating, but rather people expressing a view, initiating new shorts both in flat price and in options. Personally, I think we can go lower," Sanders said.
Adding to the pressure was data on Wednesday showing euro zone factory output fell more than expected in September against August, a reminder the region's recovery was fragile.
Apart from macro-economic issues, many analysts are bearish on copper due to fundamental supply-demand issues.
"To me this is because fundamentals for copper are not great, and they have been deteriorating for a long time," BNP Paribas analyst Stephen Briggs said.
Analysts polled by Reuters last month forecast a surplus of 182,000 tonnes this year, up from a previous forecast of 153,000 tonnes, and for it then to balloon to 328,000 tonnes in 2014.
World demand for copper has exceeded supply since the global financial crisis, but increased output from new and existing mines started reversing that trend this year.
The dollar rose against the euro and hovered close to a two-month high against the yen after a Fed member said a cut in the central bank's bond-buying operations remained a possibility next month.
A stronger U.S. currency makes it more expensive for foreign investors to buy dollar-priced commodities, pressuring prices lower. Less stimulus also means lower liquidity for business and for commodities investors, eroding demand for metals.
Investors are also scrutinising still patchy details from China's Communist Party policy meeting to set an economic blueprint for the coming decade.
The plenum "was very vague as far as pace and degree of reform. It raised uncertainty and as part of that there is selling of risky assets today," said Thomas Lam, chief economist at DMG & Partners Securities in Singapore.
China's leaders pledged to let markets play a "decisive" role in the economy, although they gave few details . China is the world's top consumer of copper, accounting for around 40 percent of refined demand.
Other metals were not hit as hard as copper - tin and nickel swam against the tide and rose. Stainless-steel making ingredient nickel ended 0.3 percent firmer at to $13,675 a tonne after news of a mine closure.
BHP Billiton said it would post lower nickel production in the current quarter after a minor earthquake closed down operations at its Perseverance mine in western Australia.
Tin, supported by concern about supply from Indonesia, gained 0.6 percent to end at $22,825 a tonne.
Aluminium gave up 0.8 percent to $1,795 a tonne, lead fell 0.4 percent to $2,098 a tonne and zinc edged up 0.1 percent to $1,886 a tonne.
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 = 6.0919 Chinese yuan)
(Additional reporting by Melanie Burton in Singapore and Maytaal Angel in London; Editing by Anthony Barker)