(Updates with official prices) * China copper imports up 12.6 pct in December * Easing credit conditions boost metals prices * Japan's biggest copper smelter suspends operations after fire By Silvia Antonioli LONDON, Jan 10 (Reuters) - Copper rose 2 percent on Tuesday as strong import data from top metals consumer China brightened the outlook for metals demand and lifted market sentiment, although concerns about the debt situation in the euro zone kept gains in check. Benchmark copper in the London Metal Exchange traded at $7,650 per tonne in official rings, up about 2 percent from a close of $7,496 on Monday. China's imports of copper rose 12.6 percent to a record high in December from the previous month, official data showed, as arbitrage and financing opportunities burnished the metal's appeal. "The copper numbers have definitely surprised on the upside," said Gayle Berry, an analyst at Barcap. "This helped to quell some of the worries about slowing metals demand ... It suggests some fears were overdone." A weaker U.S. dollar against the euro also supported industrial metals, making it more affordable for holders of other currencies to buy dollar-denominated commodities. The euro held its ground in Asia on Tuesday but could come under pressure later this week ahead of Italian and Spanish debt auctions, which will give some signs of the state of the European debt situation. A deteriorating debt crisis and tighter credit conditions in the euro zone have affected the region's economic outlook and put metals, among other assets deemed as riskier, under selling pressure. This week, however, some easing signals from the credit market helped commodities. "Yesterday we started to see some interbank market pressure easing. Loans demand from the European Central Bank has decreased significantly, and the German central bank sold bonds with a negative interest rate, highlighting that the BCE liquidity boost is starting to have some effect," said T-commodity consultant Gianclaudio Torlizzi. Should the market continue to send positive signals, it would benefit the euro and consequently metals prices, he added. RISING COSTS Chinese imports of aluminium also rose in December, and this underpinned aluminium prices, which have also been helped by recent news of production cuts. Last week, Alcoa Inc, the largest U.S. producer of aluminium, was the first to announce a cutback in response to steep aluminium price falls, slashing annual global smelting capacity by 12 percent. Analysts expect more aluminium companies to follow in Alcoa's footsteps in the next few months and cut production, helping to reduce over-supply and support prices. "Aluminium production cuts are emerging at a much higher price level than what we saw in 2008, when $1,500 was the cost-support level," Berry said. "$2,000 is were we have begun to see production cuts (recently) as operational costs have continued to increase in the last few years." Aluminium traded at $2,155 a tonne in rings from $2,108. Tin exchanged hands at $20,005 from $19,800 while zinc, used to galvanize steel was at $1,923 from $1,879 Monday's close. Battery material lead traded at $2,025 from $1,966 and nickel at $19,405 from $19,100. Pan Pacific Copper, Japan's biggest copper smelter, said on Tuesday it suspended operations at its 200,000 tonnes per year Saganoseki smelter on Jan. 7 after a fire damaged an electric power substation on the site. This highlights concerns over supply tightness in the copper market. Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 348.80 7.35 +2.15 444.70 -21.57 LME Alum 2152.25 44.25 +2.10 2470.00 -12.86 LME Cu 7689.50 193.50 +2.58 9600.00 -19.90 LME Lead 2027.25 61.25 +3.12 2550.00 -20.50 LME Nickel 19387.00 287.00 +1.50 24750.00 -21.67 LME Tin 20100.00 300.00 +1.52 26900.00 -25.28 LME Zinc 1926.25 47.25 +2.51 2454.00 -21.51 SHFE Alu 16070.00 125.00 +0.78 16840.00 -4.57 SHFE Cu* 55870.00 380.00 +0.68 71850.00 -22.24 SHFE Zin 14920.00 180.00 +1.22 19475.00 -23.39 ** 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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