September 2, 2015 / 4:13 AM / 5 years ago

METALS-London copper finds footing, global factory slowdown weighs

* Traders still selling copper rallies - trader

* LME tin rallies 1.5 percent as forwards tighten

* Coming Up: U.S. Factory orders July at 1400 GMT (Adds comment, detail, updates prices)

By Melanie Burton

MELBOURNE, Sept 2 (Reuters) - London copper climbed on Wednesday, defying sour sentiment towards base metals after world factory activity slowed in August and the International Monetary Fund cut its outlook for global growth.

Three-month copper on the London Metal Exchange edged up 0.3 percent to $5,085 a tonne by 0722 GMT, after a 1.3 percent drop in the previous session. Copper hit its weakest in six years at $4,855 a tonne at the beginning of last week.

Shanghai Futures Exchange copper fell 0.5 percent to 39,010 yuan ($6,130) a tonne.

China’s giant manufacturing industry contracted and euro zone and U.S. growth eased in August, data showed on Tuesday, while the International Monetary Fund cut its forecast for world growth this year.

“We saw some light (sell) stops first thing - that’s the tone, sell on weakness or into a rally,” a Hong Kong based trader said, adding there has been some import-related buying.

A larger drop in LME prices compared to those in China have turned imports profitable, Reuters calculations show.

But Standard Chartered sees further pain ahead for copper producers, as it slashed its price outlook.

“A combination of extreme macro pessimism, particularly regarding China, and surplus conditions projected for the next two quarters indicate that a sustained recovery is unlikely at least until Q2-2016,” it said.

The bank slashed its 4Q 2015 forecast by 28 percent to $4,900 a tonne, and by 27 percent to $5,300 a tonne for 2016.

Still, prices may be cushioned over the next few months as this year’s El Nino weather phenomenon strengthens, threatening to curb output at producers.

Ok Tedi Mining Ltd’s Papua New Guinea copper mine is likely to stay shuttered until the first quarter of 2016 due to low river levels, an executive said.

In other metals, LME nickel rose 1 percent, countering a 3.2 percent slide on Tuesday after senior government officials reaffirmed the country will keep its export ban on nickel ore. Media reports had suggested the country may relax curbs to prop up its slowing economy.

LME tin rallied by 1.5 percent to $14,900 a tonne, supported by tightness in LME futures. Cash traded for a $335 premium against the benchmark on Tuesday, the second highest since 2009. CMSN0-3

Tin stocks on hand for delivery out of LME warehouses have hit the lowest since 2008 at 3,500 tonnes after Indonesian tin companies halted exports when new rules for shipments were introduced on Aug. 1.

Some companies including state-run PT Timah have since received licences to export, suggesting at least in the physical market supply tightness should be short lived.

PRICES

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

Most active ShFE nickel

Three month LME tin

Most active ShFE tin ($1 = 6.3633 Chinese yuan) (Reporting by Melanie Burton; Editing by Richard Pullin and Tom Hogue)

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