* Copper up 3 pct in Shanghai, zinc limit up; gains in London * Firm data supports sentiment; payrolls eyed * Aluminium seen at $2,700/T on fund buying by May By Nick Trevethan SINGAPORE, Feb 3 (Reuters) - Shanghai copper rose 2.8 percent on Wednesday and London metal extended gains, after the latest batch of positive U.S. data, this time existing home sales, helped soothe jangled investor nerves. Pending sales of previously owned U.S. homes edged up as expected in December, a survey showed, allaying some fears of renewed weakness in the troubled sector. That came on the heels of a string of positive GDP and manufacturing numbers since Friday. "The numbers are good, but we need a little more consistency. The pattern has been for a string of positive numbers followed by one or two poorer indicators," a dealer in Hong Kong said. "We are holding our breath now ahead of the payrolls report at the end of the week. There is a sense that payrolls may finally reverse their long decline. But if we see another big drop the budding confidence the market is feeling will shatter." The median forecast for nonfarm payrolls is for an increase of 5,000 after an unexpected 85,000 drop in December. A rise would be only the second increase since December 2007. [ID:nN01161986] Three-month copper on the London Metal Exchange CMCU3 rose $75 to $6,895 a tonne by 0715 GMT, recovering after it hit $6,600 on Monday, its lowest since mid November, having tumbled as much as 15 percent in the previous three weeks. "We finally got the much talked of pre-Lunar New Year sell-off, but the Chinese are still not buying much because they will be shut for a week," said Nirrav Sharma of G-Steelmet, a Singapore-based trading house. "In reality, we are seeing an adjustment -- some funds are exiting, creating opportunities for others to get in. People are calling for the market to trade between $6,700 to $7,000 for a while." Benchmark third-month Shanghai copper SCFc3 rose 1,540 yuan by the close to 55,820 yuan. Southern Copper Corp, one of the world's largest copper producers, said it sees average copper prices at $3.25 per pound ($7,165 a tonne) in 2010, as it expects emerging and developed economies to boost demand for the metal. "We believe that inventories of copper will start to die off during the year, reversing the last month's trend," Southern Copper's chief financial officer, Genaro Guerrero, said on a conference call with investors. Currently LME stocks stand around one-year highs, at 541,150 tonnes, but Tuesday's data showed a decline of 2,375 tonnes, the fifth decline in around two weeks after uninterrupted increases from the end of October to mid-January MCU-STOCKS Aluminium CMAL3 rose $22 to $2,142 and the lightweight metal, despite pressure from the 4.6 million tonne LME stockpile and ballooning output in China, is one of the metals more favoured by funds, Sharma said. "Aluminium is the fund's favourite. They think the majority of the stock overhang is untouchable. With cost prices around $1,950 to $2,000 and signs of improving demand we could see prices up at $2,700 by May." Nickel CMNI3 ticked up 1 percent, immune to the ratification of a three-year pay deal by workers at Xstrata's (XTA.L: Quote, Profile, Research) Sudbury operations [ID:nN02122747] Benchmark third-month Shanghai zinc SZNc3 rose 865 yuan from Tuesday's settlement to its upside limit of 18,185 yuan a tonne after the market re-opened for the afternoon session. It closed the day at 17,985 yuan. LME zinc CMZN3, $30 stronger at $2,190, shrugged off the restart of zinc concentrate production at the Century mine in Australia after a storm last week. [ID:nSGE61206K] Base metals prices at 0715 GMT Metal Last Change Pct Move End 2009 YTD pct chg LME Cu 6895.00 75.00 +1.10 7375.00 -6.51 SHFE Cu* 55820.00 1540.00 +2.84 59900.00 -6.81 LME Alum 2142.00 22.00 +1.04 2230.00 -3.95 SHFE Alum* 16560.00 345.00 +2.13 17160.00 -3.50 COMEX Cu** 308.50 0.65 +0.21 332.75 -7.29 LME Zinc 2190.00 30.00 +1.39 2560.00 -14.45 SHFE Zinc 17985.00 830.00 +4.84 21195.00 -15.15 LME Nickel 18480.00 180.00 +0.98 18525.00 -0.24 LME Lead 2144.00 26.00 +1.23 2432.00 -11.84 LME Tin 16600.00 150.00 +0.91 16950.00 -2.06 LME/Shanghai arb^ -762 Dollar/yuan 6.8250 \ 6.8270 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Editing by Michael Urquhart)

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