* Industrial action prompts copper supply worries * Nickel cash to three-month contango narrows * U.S. August retail sales stall, undershoot forecasts By Harpreet Bhal and Melanie Burton LONDON, Sept 14 (Reuters) - Copper slipped on Wednesday due to growing unease about a potential Greece debt default while poor U.S. retail sales figures fuelled worries of a slowdown in global economic demand. Benchmark copper on the London Metal Exchange slipped to $8,687 a tonne at 1301 GMT, down from a close of $8,780 a tonne on Tuesday. Copper prices fell 5.6 percent in August, their biggest monthly drop since June 2010, and are down 6.4 percent so far this month. Poor U.S. retail sales figures for August cast doubt on the resiliance of global growth given protracted sovereign debt problems in the euro zone and growing evidence that the world's top economy is beginning to falter. "The focus is still on Europe, but markets are still very sensitive to the macro picture," analyst Leon Westgate of Standard Bank said. "The supply side story on copper is still intact and continues to lend support -- as long as the demand side also holds up -- so anything like weaker retail sales will tend to weigh on sentiment towards industrial metals." Growth in U.S. retail sales stalled in August after a pitched battle over spending in Congress led consumer confidence to crumble, data showed. Sales were unchanged from a month earlier, a substantially weaker reading than the median forecast for a 0.2 percent rise in a Reuters poll. Sales growth during July was revised downward to 0.3 percent. The poor data compounded sentiment earlier hit after ratings agency Moody's cut the credit rating of French banks Credit Agricole and Societe Generale citing exposure to Greek debt. China and the U.S. urged Europe's leaders to prevent the euro area debt mess -- now threatening Italy -- from spreading. Greek, German and French leaders are due to hold a conference call at 1600 GMT on Wednesday, which is expected to show that European leaders are working together to solve Greece's debt problems and calm markets in the short term. However, the euro extended gains against the dollar, offering a pillar of support for metals. A weaker dollar makes commodities less expensive for holders of other currencies. "We have had enough downside and there could be some pickup in demand. The Chinese will have to restock," said VTB Capital analyst Andrey Kryuchenkov. China accounts for nearly 40 percent of global copper demand estimated this year at around 19 million tonnes. The United States accounts for about 10 percent of global consumption. STRIKE THREAT Uncertainty about supply in light of recent industrial action at top copper mines also helped limit further falls in copper prices. Workers at Peru's No. 3 copper producer Cerro Verde, controlled by Freeport McMoran , said they will go ahead with an indefinite pay strike starting on Wednesday. Also, workers at Freeport's Grasberg mine in Indonesia have given the company a deadline of midnight on Wednesday to come up with a fresh pay rise offer, or they will proceed with a month-long strike. "The Grasberg mine in Indonesia and the Cerro Verde mine in Peru, two of the world's largest copper mines, are both affected by strikes starting today. The supply situation on the global copper market... should therefore intensify, which should support the price of copper in the medium term," Commerzbank analysts said in a note. Among other industrial metals, aluminium traded at $2,371 a tonne. It was untraded at the close on Tuesday but bid at $2,369 a tonne. Nickel traded at $21,280 from $21,300 a tonne on Tuesday. Tightness in the nickel market was reflected in a narrowing contango, with the discount for cash against three months at -$12 from -$43 hit early this month, its narrowest since the start of June. Zinc fell to $2,178 a tonne from a close of $2,193 on Tuesday, while lead slipped to $2,348 from $2,385. Tin changed hands at $23,450, down from Tuesday's close of $23,650 Metal Prices at 1257 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2009 Ytd Pct move COMEX Cu 394.00 -2.05 -0.52 334.65 17.73 LME Alum 2366.00 -6.00 -0.25 2230.00 6.10 LME Cu 8730.00 -50.00 -0.57 7375.00 18.37 LME Lead 2362.00 -23.00 -0.96 2432.00 -2.88 LME Nickel 21100.00 -200.00 -0.94 18525.00 13.90 LME Tin 23500.00 -150.00 -0.63 16950.00 38.64 LME Zinc 2175.00 -18.00 -0.82 2560.00 -15.04 SHFE Alu 17275.00 -115.00 -0.66 17160.00 0.67 SHFE Cu* 65050.00 -1260.00 -1.90 59900.00 8.60 SHFE Zin 16710.00 -235.00 -1.39 21195.00 -21.16 ** 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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