* Signs of small pick-up in China spot market * China CPI above expectations, driven by rising food costs * Coming Up: ECB rate decision, news conference; 1245 GMT (Recasts, adds detail, updates prices) By Melanie Burton SHANGHAI, Feb 9 (Reuters) - London copper cut losses to trade flat on Thursday, not far off this year's peak, as investors turned positive on Greece's prospects for a bailout deal, erasing earlier losses that stemmed from an uptick in Chinese inflation. Three-month copper on the London Metal Exchange pared losses to trade at almost unchanged at $8,578 a tonne by 0728 GMT, having gained more than one percent in the previous session. Copper hit a peak of $8,679.50 at the end of January -- the highest since September -- and has climbed more than 12 percent so far this year. The most-traded April copper contract on the Shanghai Futures Exchange fell 0.52 percent to 61,070 yuan a tonne. "Some speculators may be bingeing on copper, on optimism about Greece. Our longer-term view is that the dollar is going to ease. If you're buying metal now, and planning on sitting on it for a while, then that may be part of a broader play on the dollar," said Singapore-based strategist Nick Trevethan of ANZ. Greek leaders have so far failed to agree on a reform and austerity programme, the price of a financial bailout to avoid a messy default, forcing Finance Minister Evangelos Venizelos to go to the country's financial backers with an incomplete deal. Venizelos said one issue remains unresolved. China's annual inflation rate accelerated to 4.5 percent in January versus 4.1 percent in December, the National Bureau of Statistics said on Thursday, well ahead of market forecasts. "Inflation data was a little higher than expected, but it shouldn't affect China's easing policy stance. There may be some positive implications for metals if China addresses imported inflation through its exchange rate," Trevethan said. Investors may be buying more copper because they believe China may ease curbs on the residential housing market, he added. But any real demand boost would be modest because the residential sector targeted by Beijing made up a small part of the whole property sector. There were signs of a nascent pick-up in China's spot copper market, with the discount on domestic copper narrowing to around 200 yuan, from between 500 to 300 yuan before the Lunar New Year break, one trader said. But signals were mixed in the copper futures markets. The price differential between London and Shanghai narrowed on a cash basis early in the session, before widening again, and the Shanghai futures curve suggested nearby demand remains slack. In other metals, LME tin prices fell nearly 4 percent on profit-taking after hitting six-month peaks on Wednesday. Prices were cushioned by news that shipments out of top exporter Indonesia fell 27 percent on the year. Nickel prices also moderated from five-month highs on Thursday. A month-long rally in nickel risks running out of steam as import demand from top consumer China eases due to a well supplied market and a lack of appetite in Europe saps demand for stainless steel. PRICES Base metals prices at 0728 GMT Metal Last Change Pct Move YTD pct chg LME Cu 8578.00 -2.00 -0.02 12.87 SHFE CU FUT APR2 61070 -320 -0.52 10.31 HG COPPER MAR2 390.20 -0.75 -0.19 13.56 LME Alum 2257.75 4.75 +0.21 11.77 SHFE AL FUT MAY2 16285 -70 -0.43 2.78 LME Zinc 2126.75 11.75 +0.56 15.27 SHFE ZN FUT APR2 16145 -125 -0.77 9.12 LME Nickel 21400.00 -100.00 -0.47 14.38 LME Lead 2194.75 13.75 +0.63 7.85 SHFE PB FUT 16080.00 -160.00 -0.99 5.20 LME Tin 25200.00 -200.00 -0.79 31.25 LME/Shanghai arb^ 2300 Shanghai and COMEX contracts show most active months

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