* Euro zone likely to have slipped back into recession * LME aluminium Sept-Oct spread still tight * China adds to budget for infrastructure spending (Adds quotes, updates prices; previous Singapore) By Eric Onstad LONDON, Sept 5 (Reuters) - Copper lost ground for a second day on Wednesday as investors worried that the European Central Bank would fail to launch stimulus measures to revive a struggling economy and that top consumer China would take no big steps to boost slower growth. The metal used in infrastructure and power had climbed to a one-week peak on Monday in the wake of a speech by the head of the U.S. Federal Reserve that sparked hopes of measures to inject liquidity into the economy. But copper has pulled back as the release of downbeat U.S. and European economic data coincided with a reassessment of the prospects for U.S. stimulus action before a presidential election and with struggles in Europe about the role of the European Central Bank ahead of a meeting on Thursday. "I suspect markets will be a bit disappointed tomorrow," said analyst David Wilson at Citigroup in London. "In Europe, there's still the same political arguments going on about what the ECB's allowed to do and what it isn't." Markets had been hoping ECB head Mario Draghi would unveil a bold plan to tackle the euro zone's debt crisis. The concerns about the ECB meeting weighed on the euro against the dollar. A stronger dollar makes commodities priced in the U.S. currency more expensive to holders of other currencies. Three-month copper on the London Metal Exchange fell 0.3 percent to $7,613 per tonne by 1026 GMT. Copper hit a one-week high of $7,700 on Monday but has struggled to find momentum in recent months and has remained below $8,000 since mid-May, down 13 percent from a 2012 peak of $8,765 per tonne in February. "Most analysts I think probably have been forecasting slightly higher prices going into the fourth quarter, but now I think it's beginning to dawn that we might continue to have this sideways grind for the rest of the year," Wilson said. A survey published on Wednesday showed the euro zone is likely to have slipped back into recession in the current quarter as the bloc's private sector suffered a seventh month of contraction as new orders dwindled. CHINA In China, which accounts for about 40 percent of global copper demand, hopes also dimmed that authorities would attack slowing growth with big-bang stimulus measures ahead of a leadership transition. Instead there have been more moderate measures, including a series of announcements this week about infrastructure spending, notably from the Ministry of Railroads. While failing to break out of the top end of its range, copper has had strong support at the bottom of the range as the metal is still forecast to be in a deficit this year. "Things are cooling down in China but we're still expecting demand growth of 5 percent for copper, in part due to the roll-out of electricity projects. We are expecting copper to outperform other metals over the next six months," said Matt Fusarelli, an analyst at Australia-based consultancy AME Group. The most-traded December copper contract on the Shanghai Futures Exchange closed down 0.52 percent at 55,730 yuan ($8,800) per tonne. A trader in China's Guangzhou province said anticipation of further easing by Beijing had been supporting domestic prices. However, the trader said he saw copper prices falling as strong U.S. equities attracted investors and Chinese industrial demand growth moderated. In other LME metals, three-month lead rose 0.1 percent to $1,997.25 a tonne and nickel added 0.1 percent to $15,915. In aluminium, the September-October spread was still tight, trading at a $3.50 backwardation compared to a contango of about the same level last week. Three-month aluminium gave up 0.2 percent to $1,941 a tonne versus a last bid of $1,944.50 on Tuesday, solder material tin shed 0.6 percent to $19,489 a tonne versus $19,600 on Tuesday, and zinc, used in galvanizing, fell 0.2 percent to $1,873.25 versus $1,876. Metal Prices at 1036 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2011 Ytd Pct move COMEX Cu 346.20 -0.80 -0.23 344.75 0.42 LME Alum 1938.50 11.50 +0.60 2020.00 -4.03 LME Cu 7613.50 -21.50 -0.28 7600.00 0.18 LME Lead 1996.50 1.50 +0.08 2034.00 -1.84 LME Nickel 15887.00 -28.00 -0.18 18650.00 -14.82 LME Tin 19450.00 -300.00 -1.52 19200.00 1.30 LME Zinc 1872.75 -2.25 -0.12 1845.00 1.50 SHFE Alu 15500.00 10.00 +0.06 15845.00 -2.18 SHFE Cu* 55780.00 -300.00 -0.53 55360.00 0.76 SHFE Zin 14785.00 -40.00 -0.27 14795.00 -0.07 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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