* China Feb PMI faster than expected as export orders rise
* Data points to less scope for monetary easing -Macquarie
* Coming Up: U.S. construction spending; 1500 GMT (Adds Rio Tinto, updates prices)
By Manolo Serapio Jr
SINGAPORE, March 1 (Reuters) - London copper edged lower in a cautious session on Thursday as investors shrugged off data that showed top copper consumer China's manufacturing sector grew faster than forecast, waiting for greater motivation to take the market higher.
Copper has risen more than 11 percent this year, but analysts say Chinese demand has to recover strongly to justify a further increase in prices. While China's latest manufacturing data beat expectations, some think it could discourage more monetary easing by Beijing, which could dent copper demand.
China's official purchasing managers' index rose to 51.0 in February from 50.5 in January, as new export orders for big firms bounced back.
"This is also telling us that there's less possibility for China to loosen monetary policy further", with the economy getting back on its feet, said Bonnie Liu, a commodity analyst at Macquarie in Shanghai.
With the arbitrage window staying shut, giving the Chinese no incentive to import copper, and liquidity still tight, Liu said China's imports of refined copper may drop to around 250,000 tonnes in February from 335,480 tonnes in January.
China cut banks' reserve requirement ratio for the first time this year in February to spur economic growth, and economists expect more such moves are in the pipeline.
A separate private-sector survey of China's factory activity portrayed a different picture of smaller companies lagging behind the rebound.
Three-month copper on the London Metal Exchange eased 0.4 percent to $8,465 a tonne by 0707 GMT, adding to a 1 percent decline on Wednesday.
The most-traded May copper contract on the Shanghai Futures Exchange fell 1.3 percent to close at 60,290 yuan ($9,600) a tonne.
RIO SEES TIGHT MARKET
Wednesday's scramble out of risk assets, including copper, was fuelled by U.S. Federal Reserve chief Ben Bernanke's comments that the U.S. economy needs to strengthen, to cut the still high jobless rate further, and the absence of indications of more Fed bond purchases.
That countered the positive impact from the half a trillion euros in additional liquidity the European Central Bank injected into the financial system to help fight a nagging debt crisis.
But a continued draw in LME copper stockpiles suggests "that physical demand is higher than many market participants believe", Credit Suisse said in a note.
"We expect the price path in the coming days to be volatile. Nevertheless, price risks are to the upside," the bank said.
Copper stocks in warehouses monitored by the LME fell to a fresh 2-1/2 year low of 296,425 tonnes on Wednesday, down 2,425 tonnes. The ratio of cancelled warrants, material tagged for delivery, to total stocks stood at 31.69 percent, mostly in U.S. locations.
In contrast, stockpiles of copper at warehouses monitored by the Shanghai Futures Exchange CU-STX-SGH remained near 10-year highs at more than 216,000 tonnes, despite dropping slightly last week for the first time since early December.
Global miner Rio Tinto said it expects the copper market to stay tight despite growth in supply, with the company anticipating rising costs and supply disruptions to continue, following strikes last year.
Rio, which is looking to sell most of its Australia and New Zealand aluminium business, remains bearish on the aluminium market, with smelters facing a margin squeeze as costs rise and aluminium prices remain weak. Base metals prices at 0707 GMT Metal Last Change Pct Move YTD pct chg LME Cu 8465.00 -34.00 -0.40 11.38 SHFE CU FUT MAY2 60290 -780 -1.28 8.91 HG COPPER MAR2 384.60 -2.55 -0.63 11.93 LME Alum 2313.00 -17.00 -0.73 14.50 SHFE AL FUT MAY2 16195 -55 -0.34 2.21 LME Zinc 2089.00 -23.00 -1.09 13.22 SHFE ZN FUT MAY2 15890 -250 -1.55 7.40 LME Nickel 19499.00 244.00 +1.27 4.22 LME Lead 2171.75 11.75 +0.54 6.72 SHFE PB FUT 16050.00 -265.00 -1.62 5.00 LME Tin 23700.00 75.00 +0.32 23.44 LME/Shanghai arb^ 2096
Shanghai and COMEX contracts show most active months
^ LME 3-month copper in yuan, including 17 pct VAT, minus SHFE third month ($1=6.2936 Chinese yuan)
(Reporting by Manolo Serapio Jr.; Editing by Sugita Katyal)