* Copper rises a third day, climbs above $8,200 * China's new home prices fell in December * Analysts expect prices, demand to pick up in second half 2012 * Coming Up: U.S. producer prices; 1330 GMT (Updates prices) By Jane Lee KUALA LUMPUR, Jan 18 (Reuters) - Copper was steady on Wednesday, after surging to its highest in more than two months in the previous session, as investors waved off a slowdown in China's housing sector, betting that demand for commodities would rebound later this year. Three-month copper on the London Metal Exchange traded little changed at $8,201 a tonne by 0715 GMT. Prices have climbed 2.5 percent this week. The most-traded April copper contract on the Shanghai Futures Exchange slipped 0.8 percent to 59,450 yuan ($9,400) a tonne. China's new home prices fell in December from November, for a third straight month of declines, and analysts expect prices to drop further as Beijing sticks to its tightening campaign against the once-hot real estate market. "China's housing sector is facing challenges right now but this industry will still contribute to greater commodity consumption this year," said Judy Zhu, a commodities analyst at Standard Chartered in Shanghai, who forecasts LME copper averaging $9,000 in the third quarter. "We're still growing in China, but at a slower rate." Copper rallied on Tuesday to its highest price since the end of October as China's economy expanded at a faster-than-expected 8.9 percent in the fourth quarter and LME inventories fell. Copper inventories in London Metal Exchange warehouses have dropped to a 13-month low, and more declines are seen likely as a pick-up in U.S. demand and concerns about a market deficit outweigh a slowdown in buying from top consumer China. Barclays Capital expects demand growth for metals to recover in the second half this year, with copper prices to rise by around 10 percent from current levels, while gold prices are projected to climb above $2,000 an ounce by the third quarter. It forecasts copper to average $9,000 a tonne this year. Still, gains in copper prices this week may be capped as euro zone funding worries and Greece's debt talks erode investor confidence following upbeat economic data in China, Germany and the United States. Greece will return to the negotiating table with its creditors on Wednesday to discuss a plan to prevent a default and reduce the nation's debt. Funding concern in the euro zone has also made investors wary of pushing prices higher before China closes next week for the Lunar New Year holidays. Veteran trader Dennis Gartman said on Tuesday he will remain long on copper, a bullish bet he made early last week and added length to this week, even as an "inevitable correction" in price looms. Base metals prices at 0715 GMT Metal Last Change Pct Move YTD pct chg LME Cu 8201.00 1.00 +0.01 7.91 SHFE CU FUT APR2 59450 -480 -0.80 7.39 HG COPPER MAR2 373.00 0.05 +0.01 8.56 LME Alum 2210.00 -17.00 -0.76 9.41 SHFE AL FUT APR2 16370 00 +0.00 3.31 LME Zinc 1991.00 -10.00 -0.50 7.91 SHFE ZN FUT APR2 15505 -20 -0.13 4.80 LME Nickel 19418.00 -107.00 -0.55 3.78 LME Lead 2096.50 -11.50 -0.55 3.02 SHFE PB FUT 15750.00 120.00 +0.77 3.04 LME Tin 21600.00 -125.00 -0.58 12.50 LME/Shanghai arb^ 1103 Shanghai and COMEX contracts show most active months ^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month ($1=6.3150 Chinese yuan)

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