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METALS-China metals mixed; lead gains as frigid weather persists

SYDNEY, Jan 3 (Reuters) - Chinese base metals were mixed in early trade on Wednesday, as the most active copper contract slipped, while lead gained the sharpest as parts of the United States braced for more frigid weather. The peak demand period for lead, which is largely used to make batteries, is during winters when the freezing weather causes battery failures. Commodities traders said mixed signals were also emerging over the extent of China's demand for imported industrial metals in 2018, which was dampening activity among some local investors. Optimism about Chinese demand was boosted overnight by an unexpected December rise in manufacturing and a pick up in new orders. But higher prices for raw materials and firms cutting staff have fuelled concerns about growth.

However, Goldman Sachs said it sees more risks to the

upside than the downside for metals demand in China, playing down concerns of a sharp decline from policy changes.

FUNDAMENTALS

* Three-month copper on the London Metal Exchange was down 0.2 percent at $7,187.50 a tonne, by 0123 GMT, extending losses from the previous session.

* The most-traded copper contract on the Shanghai Futures

Exchange slipped 0.4 percent to 55,920 yuan

($8,615.01) a tonne.

* SHFE LEAD: ShFE lead was the top gainer on the exchange, rising more than 1 percent at the start of trade,

while zinc gained a modest 0.6 percent, failing to

build on a significant move in the LME contract overnight to a 10-year price peak on expectations of supply deficit. Lead was aided by forecasts for further cold weather in the eastern United States, which could lead to greater demand for replacement lead batteries in automobiles, a key market for the metal.

* COLD FREEZE: A record-shattering freeze kept its grip on much of the eastern United States on Tuesday, causing at least seven deaths and closing schools as forecasters warned of a storm that could slam some areas with blizzard conditions later this week.

* CHINA BANK MOVE: China's central bank lifted its official yuan midpoint CNY=PBOC to the highest level in over 1-1/2 years to 6.4920 per dollar on Wednesday, breaching a key threshold, reflecting broad dollar weakness and solid spot yuan performance.

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MARKETS NEWS

* Asian stocks struck a fresh decade high on Wednesday as risk appetites were whetted by a bevy of upbeat manufacturing surveys that confirmed a synchronised upturn in world growth was well under way.

PRICES 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 Most active ShFE nickel Three month LME tin Most active ShFE tin

ARBS

($1 = 6.4910 Chinese yuan)

(Reporting by James Regan; Editing by Sherry Jacob-Phillips)