UPDATE 1-Shanghai zinc limit down, copper wilts, LME weighs

(Updates prices, adds other metals, quotes)

By Nick Trevethan

SINGAPORE, Nov 2 (Reuters) - Shanghai zinc tumbled by its 4
percent daily limit on Friday to a contract low, while copper
fell on the heels of an almost 3 percent slide in London
futures in the previous session and softer equity markets.

Other metals were also under pressure from jitters about
rising levels of inventory and a weaker global growth outlook.

January's zinc contract SCFF8, the most active on the
Shanghai Futures Exchange, fell to 23,745 yuan ($3,182) a
tonne, the lowest since the contract was launched in March,
down 4 percent from Thursday's settlement price.
By 0216 GMT, Shanghai zinc was at 23,770 yuan, while London
Metal Exchange zinc MZN3 was $25 weaker at $2,715, after it
lost $80 on Thursday.

"The falling LME price put a lot of pressure on Shanghai
zinc. In addition, the physical market is sluggish, and excess
stock is going into warehouses," said Li Rong, an analyst at
Great Wall Futures.

Stocks of zinc in LME warehouses have jumped nearly 30
percent since last week to more than 77,000 tonnes -- more than
two days of global consumption, while copper stocks monitored
by the exchange stand at 167,000 tonnes, up nearly 30 percent
since early October.

But Shanghai copper inventories are seen falling by around
1,000 tonnes when weekly data are released after the market
closes.

Benchmark Shanghai copper SCFF8, fell 1.7 percent or
1,080 yuan from Thursday's close, to 63,330 yuan ($8,489), but
copper for delivery in three months on the London Metal
Exchange MCU3 pared some of the previous day's $220 fall,
rising $20 to $7,520.

"The fall in LME copper has eroded confidence. The peak
season of consumption is short this year and the market is
worried about the growing LME stockpile," said Ni Yaoxiang, an
analyst at Huawen Futures. "Imports and growing production of
copper have far surpassed demand."

WEAKER OUTLOOK

Copper was dented by rising stocks, continuing concerns
about the U.S. economy and limited Chinese buying, Standard
Bank, London, said in a report,.

"Some position squaring is to be expected ahead the
weekend, which may see copper recoup some of its losses. In the
short term at least, copper appears to be weak," it said.

Economists expect over the next few quarters that the U.S.
economy will grow at less than half the surprisingly strong 3.9
percent annual rate in the July-September quarter.
[ID:nN01645056]

"The economy grew solidly in the spring and the summer but
that strong spell may be history," said Joel Naroff, president
of Naroff Economic Advisors in Holland, Pennsylvania.

That softer outlook -- along with a mining sector downgrade
to "neutral" from "attractive" by investment bank Goldman
Sachs, and the 2.6 percent slide in the Dow Jones Industrial
average .DJI -- weighed on mining stocks. [ID:nWNA1526]

BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz) fell 3.4 percent and Rio Tinto lost
3.7 percent after a 4.6 percent rally in the previous session
to a new record high.

LME tin MSN3 fell $50 to $16,450.

The resumption of tin mining in Britain took a step closer
with the launch of a new mining company to run South Crofty in
the southwestern county of Cornwall.

Western Union Mines Ltd will invest in tunnelling and
exploration drilling activities, and more than 50 million
pounds ($104.1 million) of investment has been earmarked by the
time production is due to restart at the end of 2009.
[ID:nL01532113] The technical outlook for tin could turn
bearish, Triland Metals said in a report. The brokerage pegged
support at $16,450 initially, then $16,300.

"A break through $16,000 would damage upside integrity and
could spark speculative long liquidation forcing a test of the
$15,600 level."
Metal Prices by 0216 GMT:
Metal Last Change Pct Move End 2006 Pct chg
07
LME Cu 7520.00 20.00 +0.27 6330.00
18.80
SHFE Cu* 63330.00 -1080.00 -1.68 60080.00
5.41
LME Alum 2536.00 -5.00 -0.20 2805.00
-9.59
SHFE Alum* 18350.00 -120.00 -0.65 20550.00
-10.71
COMEX Cu** 335.60 0.00 +0.00 287.10
16.89
LME Zinc 2715.00 -25.00 -0.91 4230.00
-35.82
SHFE Zinc* 23770.00 -820.00 -3.33 28915.00
-17.79
LME Nickel 32300.00 -100.00 -0.31 33325.00
-3.08
LME Lead 3580.00 10.00 +0.28 1670.00
114.37
LME Tin 16450.00 -50.00 -0.30 11510.00
42.92
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc

SHFE zinc began trading on March 26, 2007
($1=7.460 yuan)
(Additional reporting by Rujun Shen and Alfred Cang in
Shanghai)