METALS-London copper slips as mood sours, China worries resurface

* ShFE copper premiums slip by $5 to $120-$140 -Shmet

* Speculators add to short positions in copper -CFTC

* Coming up: U.S. Industrial output at 1315 GMT

(Adds detail; updates prices)

SYDNEY, March 17 (Reuters) - London copper fell on Monday, hovering close to last week's three-year lows on concerns about Chinese growth and the potential for further defaults that encouraged fresh bets that prices will fall.

Copper slumped last week after a Chinese bond default sparked fears financiers in the country would dump the metal. Some tentative buying was seen early in Asia, but after a pause, selling resumed, fuelled by poor chart signals.

"Real demand is resuming month-on-month in March and it may be better in April," said analyst Chunlan Li at consultancy CRU in Beijing.

"But year-on-year it's slowing down. Real estate-related copper demand and air conditioner demand is not that good compared to last year. We are now waiting to see if there's anything optimistic from the grid side."

Three-month copper on the London Metal Exchange fell by 0.7 percent to $6,426 a tonne by 0747 GMT, after climbing 0.8 percent in the previous session.

LME copper fell to $6,376.25 a tonne on March 12 - its lowest since July 2010.

The most-traded June copper contract on the Shanghai Futures Exchange reversed early gains to close down by 0.4 percent at 44,170 yuan ($7,200) a tonne in the second trading session.

There were some signs of brighter domestic demand, with local prices for physical metal trading at a premium to front-month ShFE futures prices, from a discount for the past month.

Also supporting prices, Beijing announced plans to speed the pace of urbanisation. The government outlined infrastructure investment plans aimed at raising the proportion of the population living in cities to 60 percent by 2020 from 53.7 percent now.

But appetite hasn't extended to global copper inventories. Premiums for copper held in Shanghai bonded warehouses slipped by $5 from Friday to $120-$140 a tonne, according to China price provider Shmet. (http://www.shmet.com)

The Chinese central bank's decision to relax its grip on the yuan has been welcomed as a sign of financial liberalisation, but it is aggravating concerns among foreign executives and investors about their exposure to China in the near term.

Industry sources, however, remained confident that Beijing would act if growth slowed beyond its targets.

"Due to the poor economic performance in Jan-March, the GDP growth rate for first quarter might be not able to meet the government's requirements, and we might see policies that act as support for prices in future," Li added.

Escalating tensions over Russia hung over share markets in Asia, curbing risk appetite and containing metals prices.

Russian state media said Crimeans voted overwhelmingly to break with Ukraine and join Russia on Sunday, as Kiev accused Moscow of pouring forces into the peninsula and warned separatist leaders "the ground will burn under their feet".

Elsewhere, U.S speculators added to their bearish view on copper. Commodity Futures Trading Commission's Commitments of Traders report in the week to March 11 showed speculators increased net short positions in copper.


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 = 6.1502 Chinese Yuan)

(Reporting by Melanie Burton; Editing by Joseph Radford and Sunil Nair)