(Reuters) - Copper steadied near $8,400 a metric tonne on Tuesday as brisk manufacturing data in top consumer China helped counter concerns about a recession in Spain and a fragile U.S. economy.

Trading was thin with most Asian markets shut for the May Day holiday, including China, limiting the market impact of data showing a sustained expansion in China's factory sector.

China's official purchasing managers' index rose to 53.3 in April from 53.1 in March, signaling the world's No. 2 economy may be quietly recovering from a first-quarter trough.

It's a positive read and should ease some of the market jitters coming from the euro zone of late, said Natalie Robertson, analyst at Australia and New Zealand Bank.

The tight supply situation has been holding up prices quite strongly and all we need is to see a pickup in demand and prices will continue to rally.

Three-month copper on the London Metal Exchange slipped $20 to $8,380 a metric tonne by 11:14 p.m. EDT, after hitting a session high of $8,420. Volume traded on LME Select was a paltry 663 lots.

Tight global supply has helped copper gain 10 percent so far this year given delays in additional capacity coming through to market.

Global demand for refined copper is expected to exceed production by 240,000 tonnes in 2012, before it reverses a three-year trend of market deficits with a production surplus in 2013, according to the International Copper Study Group on Monday.

CHALLENGING CONDITIONS

Copper rose to its highest in nearly a month on Monday, hitting $8,496.75, as LME stockpiles fell to the lowest since October 2008, at 241,550 tonnes.

Because of tighter LME supplies, which have sharply pushed up premiums of spot prices over those for later deliveries, large Chinese copper smelters said they will sell refined copper to LME warehouses over the next two months.

The premium for LME cash copper against three-month delivery material soared to $149 per metric tonne on Friday, the highest since August 2008.

The supply deficit should help copper prices, which have fallen more than 4 percent from the 2012 peak of $8,765, recover in the second half, said Credit Suisse.

For the very near term, it will be important for the market to defend the $7,900/$8,000 support in order to prevent another bout of weakness, Credit Suisse said in a note.

The challenging economic conditions are taming some copper bulls. While China's economy is showing some signs of perking up this quarter, the U.S. economy appeared to downshift, with consumers increasing their spending only modestly last month and a gauge of business activity in the Midwest falling sharply in April.

There was more bad news out of Europe on Monday after Spain sank into recession in the first quarter and economists say spending cuts and a reeling bank sector would delay any return to growth until late this year or beyond.

(Reporting by Manolo Serapio Jr.; Editing by Kim Coghill)