* China Jan official services PMI falls to 52.9 * Shanghai copper stocks surge 36.6 percent * Coming Up: U.S. non-farm payrolls; 1330 GMT By Susan Thomas LONDON, Feb 3 (Reuters) - Copper rose on Friday on a softer dollar, but caution ahead of key U.S. employment data and little appetite from big consumer China for metals after a recent sharp price rise kept a lid on further gains. Benchmark three-month copper was up 0.4 percent at $8,379 from $8,345 at the close on Thursday. The metal headed for its first weekly loss after three straight weeks of gains on the concerns about demand in China and worries about Greece's drawn-out debt deal, taking the steam out of last week's rally to a four-month high. Signalling softer demand, inventories of copper in warehouses monitored by the Shanghai Futures Exchange surged by more than one third over the past two weeks, data showed, because of strong imports in January and slower consumption during the Lunar New Year holidays. "It is difficult to read the numbers because of the Chinese New Year, but nevertheless it does seem the rush of imports was not to go for immediate consumption but rather into stocks, which gives pause for thought," BNP Paribas analyst Stephen Briggs said. A dip in China's non-manufacturing sector also dampened spirits. On Wednesday, government data showed China's factory activity rose in January. But it was a different picture for the services sector with official data on Friday showing it fell to 52.9 in January from 56.0 in December as property tightening measures weighed on demand. "Overall, it seems that China's appetite for metals is currently less voracious, particularly after the sharp price increase during the Chinese New Year holiday," Credit Suisse said in a research note. It said Chinese consumers were likely to re-enter the market once prices come off current levels. "Accordingly, the sector could be due for a breather. Today's focus will be on the US non-farm payrolls data," Credit Suisee said. A strong U.S. nonfarm payrolls report would fuel hopes the world's largest economy is on a firm recovery path, while disappointing numbers could add to pressure on the U.S. Federal Reserve to stimulate the economy, supporting appetite for riskier assets. Ahead of that data, new claims for unemployment benefits in the United States fell more than expected last week, pointing to further healing in the nation's battered jobs market. The dollar remained under pressure ahead of the U.S. jobs report at 1330 GMT. A weaker dollar can lift dollar-denominated commodities prices by making them less expensive for consumers using other currencies. GLENCORE Another big feature for the metals market is news that commodities trader Glencore is in talks to buy mining group Xstrata that could create a group worth more than 50 billion pounds ($79 billion). "People will be looking at any implications for this," Briggs said. "Clearly these sorts of mergers increase concentration in the mining industry, which is bullish...but not necessarily good news for consumers." Tin was down 0.2 percent at $24,100 from $24,150, zinc was up 0.9 percent at $2,114 from $2,095 , lead was up 1.3 percent at $2,193 from $2,164 , aluminium was up 1 percent $2,217 from $2,195, and nickel was up 0.5 percent at $20,950 from $20,850. Metal Prices at 1033 GMT 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 380.65 2.55 +0.67 444.70 -14.40 LME Alum 2216.50 21.50 +0.98 2470.00 -10.26 LME Cu 8376.00 31.00 +0.37 9600.00 -12.75 LME Lead 2191.50 27.50 +1.27 2550.00 -14.06 LME Nickel 20951.00 101.00 +0.48 24750.00 -15.35 LME Tin 24000.00 -150.00 -0.62 26900.00 -10.78 LME Zinc 2113.75 18.75 +0.89 2454.00 -13.87 SHFE Alu 16190.00 -80.00 -0.49 16840.00 -3.86 SHFE Cu* 59820.00 -60.00 -0.10 71850.00 -16.74 SHFE Zin 15955.00 10.00 +0.06 19475.00 -18.07 ** 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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