* Start date for Chile Caserones copper mine delayed to May * China markets to reopen after week-long break on Friday * Coming Up: European Central Bank rate decision at 1245 GMT (Adds detail, updates prices) By Melanie Burton SYDNEY, Feb 6 (Reuters) - London copper hovered just above two-month lows on Thursday, supported by expectations of improving -- if fragile -- economic growth this year, and as traders anticipated a pickup in prices when China returns from holiday on Friday. Copper prices staged a nine-session downtrend from Jan. 21, buffeted by evidence that China's factories suffered a slow start to the year, and after fitful U.S. growth data. But a brightening U.S. service sector and generally improving manufacturing health elsewhere in Asia, and in Europe have soothed investors' concerns. The stage is set for a modest uptick in copper buying when China re-enters the market from Friday, as activity begins to ramp up for what is normally the most robust quarter of the year, Singapore-based analyst Sijin Cheng of Barclays said. "If manufacturing picks up seasonally, the fundamental factors are aligned for at least a modest pick up in prices," she said. China's factories are lightly stocked given copper imports were uneconomic in January when LME prices shot to seven month peaks but domestic prices failed to follow, while financing-led appetite for copper imports remains solid, she said. Three-month copper on the London Metal Exchange was up 0.1 percent at $7,045.75 a tonne at 0725 GMT, after closing the last session little changed. Prices hit a 2-month low on Tuesday at $7,016 and are down around 4 percent on the year. Trading volumes remained very low for a fifth day, with less than 3000 lots of turnover across the complex. China's stock, bond, foreign exchange and commodity futures markets, are set to reopen on Friday. Supporting fragile optimism on a economic revival, growth improved in the U.S. service sector in January, with steady strength in private-sector hiring, suggesting the winter weather that socked the country over the last several weeks had a limited effect on the economy. Also, the euro zone's private sector logged its busiest month in 2-1/2 years in January but firms slashed prices, which could fan fears of deflation before a policy decision from the European Central Bank, surveys showed on Wednesday. In news, Nippon Mining & Metals Corp, parent of Japan's top copper smelter, said on Thursday it has pushed back the start of its Caserones copper mine operation in Chile to May from January due to a system trouble and delay in construction. Also, the LME pressed on with reforms to its controversial warehousing network on Wednesday, appointing external consultants and lawyers to advise whether more deep-rooted changes are needed to slash backlogs. Industry participants have blamed queues at warehouses for sky rocketing aluminium premiums, and the LME set down a string of new regulations to cut queues to 50 days from more than a year in some places in response. Premiums are a surcharge paid to take delivery of metal. The queues built up in part because warehousers took in more metal than they delivered out, and because traders could profit from storing metal cheaply while prices rose over time. However, Citi said in a report that financing demand for aluminium was more likely than queues to be the main driver for soaring premiums, and, given that future aluminium prices remain well above cash prices, premiums were likely to stay high. Just because the LME's new rules may force warehousers to deliver out more metal, doesn't mean the metal will be readily available to the market as it will likely just go into cheaper, non-LME registered warehouses for financing, Citi said. Record premiums have helped drive LME aluminium prices to 4-1/2 year lows just under $1,700 a tonne.

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