By Silvia Antonioli
    LONDON, Oct 3 (Reuters) - Copper fell more than 5 percent to its lowest since July 2010 on Monday after Greece admitted it would miss its deficit target and improving but still disappointing economic data from China fuelled worries over metals demand growth.
    Benchmark copper on the London Metal Exchange declined to a session low of $6,635 a tonne, its weakest since July 21, 2010. The metal, used in power and construction, traded at $6,820 a tonne in official rings from a close at $7,018.5 on Friday.
    "Sentiment is still very poor ... we are seeing increasingly bearish macro views being expressed through base metals and copper in particular," said Gayle Berry, an analyst at Barclays Capital in London.
     Greece will miss a deficit target set just months ago in a massive bailout package, according to government draft budget figures released on Sunday, showing that drastic steps taken to avert bankruptcy may not be enough.

    The HSBC Purchasing Managers' Index for China's services sector rose to 53.0 in September, recovering from an all-time low of 50.6 in August, lifted by new orders.
    "Investors are concerned that the EU situation will have an impact on Chinese exports demand, and the PMI data wasn't much of the improvement that you would expect to see at this time of the year," Berry added, underlining that tighter credit conditions in China were also worrying investors.
    Some, however, thought concerns about an economic slowdown in China were overdone.
    "We believe the markets have panicked unjustifiably about China," said Standard Chartered in a note.
    "Economic data remains constructive overall, and while exporters will suffer in 2012, domestic growth and the room for policy loosening is being underestimated."
    Adding to economic worries, car sales in Spain fell to their lowest
September total in 15 years and also dipped in France, leading analysts to say a gloomy economic outlook in Europe meant worse could be expected in coming
months.
    Currency exchange rates also weighed on metals.
     The euro hovered near a eight-month trough against the dollar on worries about the health of the euro zone's banking sector amid mounting concerns about a Greek default.
    A stronger U.S. currency makes dollar-priced commodities costlier for holders of other currencies.
   
   
    COST SUPPORT  
    Aluminium traded at $2,158 a tonne in official rings from $2,163 at
the close on Friday.
    "The recent divergence between the fall in prices of copper and aluminium underlines the perception that commodities investors always turn to marginal cost of production in order to guess the potential losses during a market downturn," said Metal Bulletin Research analyst Kamil Wlazly.
    "The price of aluminium is already at levels below its average marginal cost of production of close to $2,500 per tonne. This limits a further downside due to the potential of supply cutbacks."
    Zinc and nickel were also supported by high production costs in comparison with their trading prices.
    "For some of the metals such as aluminium, zinc and to some extent nickel, there is a certain risk that some production will be curtailed in the next few months," said Berry.
    "These will prevent their prices from falling as much as other metals that are trading much above their cost of production."
    Zinc , used to galvanize steel, traded at $1,871 a tonne in rings
from $1,860 Friday's close while nickel , untraded in rings, was bid at
$18,145 from $17,600 at Friday's close.
    Tin changed hands at $20,050 from $20,350 while battery material
lead traded at $1,960.5 in rings from $1,985.
   
Metal Prices at 1206 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       309.30       -5.55     -1.76     444.70    -30.45
  LME Alum      2155.25       -7.75     -0.36    2470.00    -12.74
  LME Cu        6850.00     -168.50     -2.40    9600.00    -28.65
  LME Lead      1971.25      -13.75     -0.69    2550.00    -22.70
  LME Nickel   18175.00      575.00     +3.27   24750.00    -26.57
  LME Tin      20100.00     -250.00     -1.23   26900.00    -25.28
  LME Zinc      1872.50       12.50     +0.67    2454.00    -23.70
  SHFE Alu     16640.00      165.00     +1.00   16840.00     -1.19
  SHFE Cu*     54790.00     2190.00     +4.16   71850.00    -23.74
  SHFE Zin     15400.00      715.00     +4.87   19475.00    -20.92
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07