* Nickel seen as good buy with supply tightness
* Copper drifts from near four month top
* Coming Up: U.S. ISM non-manufacturing PMI Apr at 1400 GMT (Adds detail, updates prices)
By Melanie Burton
MELBOURNE, May 5 (Reuters) - London nickel edged to its highest level in five weeks on Tuesday as prospects of tighter supply and a technical rally drove a recovery from last month’s six year lows.
London copper slipped from near four month highs as markets more broadly digested a stream of weak global factory reports that may push monetary officials in the U.S. and China to maintain easier policies.
“The whole case for nickel tightness from the Indonesian ore export ban and run down of stockpiles hasn’t played out very well — but it’s a great price to be buying nickel through a cycle,” said analyst Daniel Morgan at UBS in Sydney.
“You’ve got a lot of guys losing money at these levels.”
Three-month nickel on the London Metal Exchange (LME) was up 0.6 percent at $13,830 a tonne in a broadly weaker market, having touched $13,990 a tonne, its loftiest since March 26. It has recovered almost 14 percent from a 6-year low of $12,205 hit in mid April.
The most traded Shanghai Futures Exchange contract also climbed by 0.7 percent, fuelled by short-covering ahead of the newly minted contract’s first delivery date.
LME copper eased by 0.5 percent to $6,371.50 a tonne by 0729 GMT. Prices on Friday climbed to the highest since Dec. 19 at $6,424.50.
ShFE July copper held 0.6 percent gains.
Miner and commodity trader Glencore reported a 9 percent fall in first-quarter copper production mostly due to lower copper grades at its Alumbrera and Antamina mines in South America and maintenance at the Collahuasi mine.
The steep fall in output could underpin prices by resurrecting the spectre of a deficit. LME copper is widely expected to reach a small surplus this year, but historically falls short of forecasts.
New orders for U.S. factory goods recorded their biggest increase in eight months in March, boosted by demand for transportation equipment, but the underlying trend remained weak against the backdrop of a strong dollar.
Euro zone manufacturing growth eased in April but factories raised prices for the first time in eight months, while China’s factories suffered their fastest drop in activity in a year in April on shrinking new orders hardened the case for fresh stimulus measures to halt a slowdown in the world’s second-largest economy.
Still, stimulus measures aren’t expected to be particularly base metals intensive, added Morgan, as China moves to support its burgeoning service sector.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
$1 = 6.2085 Chinese yuan renminbi Reporting by Melanie Burton; Editing by Michael Perry