METALS-Copper slides on economic recovery doubts

* Short cover buyers pull metals off lows in late trade

* Stock markets, oil decline, dollar gains as risk aversion trade returns

* Strong U.S. manufacturing data fails to lift metals (Adds New York closing prices, comment. Changes byline, dateline. Reledes, rewrites throughout.)

By Carole Vaporean and Michael Taylor

NEW YORK/LONDON, Aug 17 (Reuters) - Copper prices pared earlier losses after delving over 3 percent lower on Monday, as some short-cover buyers came in the market late in the New York session, but uncertainty over global economic recovery continued to weigh on industrial metals.

Copper for three-month delivery MCU3 on the London Metal Exchange closed at $6,050 a tonne, but moved up to $6,093 in after-hours trade, from $6,245 at the close on Friday. The $6,000-a-tonne session low dated back to Aug. 12.

In New York, copper for September delivery HGU9 finished 6.55 cents, or 2.31 percent, lower at $2.7705 a lb on the New York Mercantile Exchange's COMEX division. The range low extended down to $2.7265, the lowest since last Wednesday.

Risk-averse investors were selling commodities across the board, from metals to crude oil, after weak consumer confidence data released last Friday cast doubt on the pace of economic recovery.

When selling continued on Monday, along with steep declines in global equity markets, fear spread among metals traders that industrial metals prices may have overshot to the upside.

"Industrial metals got significantly overbought late last week. A couple of reports came out that hit foreign and U.S. stock markets. So, we've had some technical selling against that," said Integrated Brokerage Services LLC head precious metals trader Frank McGhee in Chicago.

On Friday, copper on the LME and on COMEX rose to highs dating back to last September, but by the end Monday some players had found value at the sharply lower levels.

"We've got a little bit of short-covering coming back into the market," said McGhee.

Earlier, prices were weak even in the face of positive U.S. data. A gauge of manufacturing activity in New York State moved into positive territory in July, suggesting the sector grew for the first time since April 2008. [ID:nN17369652]

"People are suspicious about current pricing and want to see if it's sustainable, many big buyers are in a wait and see position," said Abe Ulusal, a broker at Mitsui Bussan Commodities.

He said the stronger dollar and weaker global stock markets weighed on copper, adding that the metal used in power and construction had run up too high, too quickly.

A strong dollar makes dollar-denominated metals more expensive for non-U.S. investors.

Copper prices have nearly doubled since the start of this year, mostly due to strong buying from China, the world's largest copper consumer, and also on hopes for economic recovery.

Rising copper stocks on the London Metal Exchange indicated that fundamentals may be weakening. Monday's LME data showed copper inventories rose 1,175 tonnes to 294,050 tonnes.

In Shanghai, copper traded to its 5 percent downside limit on a surge in Shanghai exchange warehouse stocks to a two-year high, adding pressure to prices in London and New York.

NICKEL PLUNGES

Steel making ingredient nickel MNI3 fell more than 6 percent to a low of $18,301 a tonne, but cut nearly all of its declines to $19,400 by late Monday from $19,500 on Friday.

Nickel supply continues to concern traders watching strikers at Vale Inco's (VALE5.SA) Canadian operations. [ID:nN11527137]

In other industrial metals, aluminium also trimmed nearly all of its earlier steep losses to steady at $1,978 a tonne from $1,990 previously. LME stocks of the metal, used in transport and packaging, fell 5,075 tonnes but remained at near-record levels above 4.5 million tonnes.

Aluminium has gained more than 25 percent this year despite record inventories. Analysts say financing deals, which have tied up about 70 percent of LME stocks, are partly behind the surge. [ID:nLL175677]

Battery material lead MPB3 was last bid at $1,815 from $1,780 at the low and from $1,862 at Friday's close. Zinc MZN3 was last bid at $1,799 from a last bid at $1,825 on Friday. Tin, used in electrical solder, MSN3 was last at $14,050, up from the low at $13,850 and $14,450 on Friday.

Investors remained concerned about the scale of long or buy positions in the tin market, compared with the amount of available metal in LME warehouses. [ID:nL7149027]

Metal Prices at 1615 GMT Metal Last Change Pct Move End 2008 Ytd Pct

move COMEX Cu 274.00 -9.40 -3.32 139.50 96.42 LME Alum 1960.00 -30.00 -1.51 1535.00 27.69 LME Cu 6075.00 -165.00 -2.64 3060.00 98.53 LME Lead 1800.00 -62.00 -3.33 999.00 80.18 LME Nickel 19260.00 -240.00 -1.23 11700.00 64.62 LME Tin 13815.00 -635.00 -4.39 10700.00 29.11 LME Zinc 1775.00 -135.00 -7.07 1208.00 46.94 SHFE Alu 14570.00 -690.00 -4.52 11540.00 26.26 SHFE Cu* 47790.00 -2370.00 -4.72 23840.00 100.46 SHFE Zin 14465.00 -690.00 -4.55 10120.00 42.93 ** 1st contract month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Editing by Christian Wiessner)