* Copper, zinc flip into backwardation * Stocks of copper fall in LME, SHFE warehouses By Silvia Antonioli LONDON, Dec 11 (Reuters) - Copper was steady on Wednesday near a one-month high hit the previous day, stabilising after three sessions of gains on the back of solid demand from top metals consumer China. Benchmark copper on the London Metal Exchange was up 0.1 percent at $7,168 a tonne by 0935 GMT, having gained 1.3 percent over the previous three sessions. The metal hit a one-month high of $7,188 a tonne on Tuesday, its highest since Nov. 11. "The markets are beginning to wake up to the fact that Chinese demand has been improving," said Barclays analyst Gayle Berry. "It has been improving since the second quarter and the pace of consumption has continued to pick up." China's leaders began mapping out their economic and reform plans for 2014 behind closed doors on Tuesday, and have drawn confidence from data showing the economy has sustained momentum from a mid-year pick-up into the final quarter. Copper prices have been buoyed by tight availability of physical metal, also due to a shortfall in scrap supply and falling stocks in warehouses monitored by the LME and the Shanghai Futures Exchange. Strong demand for financing in China also helped as copper is commonly used as collateral to obtain financing for reinvestment into higher yielding assets. Worries of a repeat of June's cash crunch as well strength in the yuan are feeding import demand. COPPER BACKWARDATION Chinese production of refined copper and primary aluminium hit a monthly record in November, data from the National Bureau of Statistics showed on Wednesday. Copper scrap imports improved to 430,000 tonnes from 360,000 tonnes in October, preliminary data showed this week. Last month's data showed scrap imports were still down by some 10 percent from year ago levels. Tighter supply of metal for prompt delivery reflected in the copper LME futures forward curve flipping from a contango - a discount for cash futures over three-month prices, into a backwardation, or a premium for cash contracts over three-month prices. A similar scenario is playing out in zinc, also suffering from tight supply and another popular means of financing in China. The majority of LME zinc stocks are stuck in a backlog in New Orleans. Cash zinc was at tiny $1.25 discount against the three-month contract on Tuesday , the highest since July last year.

Source