By Melanie Burton

MELBOURNE, Jan 9 (Reuters) - London copper inched lower on

Wednesday as investors trimmed risk on the unfolding corporate

earnings season, but hopes that Chinese trade data this week

will show the world's top metals consumer extending its recovery

helped support prices.

Also impacting metals prices were developments in the United

States, where lingering worries over an interim fix to the

fiscal cliff of expiring tax cuts and spending increases was

eroding appetite for risky assets.

'Concerns over growth coming out of Europe and also the U.S

is keeping a lid on prices moving higher,' said Jonathan

Barratt, chief executive of Barratt's Bulletin, a Sydney-based

commodity research firm.

'But we still feel that there are supply constraints and

also that the manufacturing sector in China is going to see a

huge infrastructure boost this year and that will see prices

significantly higher,' he added.

Barratt sees gains of 10-15 percent in copper prices in the

first quarter. China is the world's top copper consumer

accounting for 40 percent of refined demand.

Three-month copper on the London Metal Exchange

traded at $8,068 a tonne by 0218 GMT, down by 0.15 percent from

the previous session when it logged small gains of less than 0.2

percent.

Prices have established a base above the $8,000 mark so far

this year, recovering from lows near $7,500 a tonne in November.

But they have eased from the year's peak at $8,256.50 hit last

week, which was the highest since Oct. 18.

Asian shares inched up on Wednesday but the upside was

limited as investors waited warily for the earnings season to

begin in earnest, preferring in the meantime to book profits

from a sharp rally at the start of the year.

'Very few hedge funds in North America are seeing any change

from 2012 for the moment, meaning they are not rushing to add

risk in base metals. If anything they doubt the recent year

start rally and are looking at it from a selling point of view,'

said a metals trader based in New York.

The most-traded April copper contract on the Shanghai

Futures Exchange traded barely changed at 58,260 yuan

($9,400) a tonne.

Growth in China's vast manufacturing sector picked up in

December, but copper purchases likely fell as year-end demand

dwindled while local output stayed strong.

China, the world's biggest consumer of most commodities, is

due to release December trade data on Thursday.

ALCOA EARNINGS

Unofficially kicking off the earnings season, Alcoa Inc expressed cautious optimism that demand for aluminium

will continue to grow in 2013, helped in part by global growth

in the aerospace and construction markets.

It also said production cuts and closures carried out this

year have helped it move further down the smelting cost curve.

Aluminium prices have been dogged by oversupply and the

aluminium market will remain in physical as well as structural

surplus in 2013, for the sixth year in a row, said BNP Paribas

in a note. It sees the cumulative surplus in 2008-12 at nine

million tonnes.

'It is difficult to be positive about aluminium's price

prospects...a case can be made...for the LME price to weaken to

well below $2,000/t in order to force producer cuts so as to

bring supply into line with demand,' it said.

'So the risks to our forecast of the average LME price in

2013 of $2,200/t are on the downside.'

LME aluminium traded at $2,067.50, down half a percent.

PRICES

Base metals prices at 0217 GMT

Metal Last Change Pct Move YTD pct chg

LME Cu 8068.00 -12.00 -0.15 1.75

SHFE CU FUT APR3 58260 -40 -0.07 1.01

HG COPPER MAR3 367.15 -0.05 -0.01 0.52

LME Alum 2067.50 -0.50 -0.02 -0.17

SHFE AL FUT MAR3 15260 20 +0.13 -0.55

LME Zinc 2022.25 2.25 +0.11 -2.00

SHFE ZN FUT APR3 15445 -100 -0.64 -0.64

LME Nickel 17325.00 0.00 +0.00 0.99

LME Lead 2318.50 -9.50 -0.41 -0.92

SHFE PB FUT 15120.00 0.00 +0.00 -0.85

LME Tin 24050.00 -100.00 -0.41 2.78

LME/Shanghai arb^ 631

Shanghai and COMEX contracts show most active months

($1 = 6.2241 Chinese yuan)

(Editing by Joseph Radford and Tom Hogue)

((melanie.burton@thomsonreuters.com)(+65 6870 3017)(Reuters

Messaging: melanie.burton.thomsonreuters.com@reuters.net))

(Reuters 3000Xtra subscribers can access Metals Production Database by clicking on URL below http://mpd.session.rservices.com For related news and prices, click on the codes in brackets: LME price overview COMEX copper futures Base metals news All metals news All commodities news Metals diary Foreign exchange rates SPEED GUIDES)

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