* Copper on track for first monthly loss since December * Further downside corrections seen, may bounce in Nov * Little appetite to hold positions over China holidays * here (Updates prices)
SINGAPORE, Sept 29 (Reuters) - Shanghai copper rose 1.3 percent on Tuesday and London futures traded off the previous session's near six-week low as Chinese investors wind down ahead of National Day and Autumn Festival holidays.
Dealers said there was little interest in establishing positions on Shanghai ahead of week-long holidays starting on October 1.
"Domestic clients have closed out their positions as they are worried about the long holiday. But I don't think London will slide like it did last year," a trader in Shanghai said.
A collapse in London Metal Exchange prices, which fell by a third in less than two weeks from late September, all but paralysed Shanghai for most of October as daily limits hampered efforts to catch up with the slide in international prices.
Market open interest across Shanghai copper stands at 338,776 lots, its lowest since early March.
Three-month copper on the London Metal Exchangefell $54 to $5,955 a tonne by 0703 GMT.
Copper, which has rallied 95 percent this year, is heading for an 8 percent fall in September, its first monthly decline since December 2008.
"The general feeling is that prices are pushing lower and if copper breaks below $5,800 we will see another spike down. But I think orders will pick up again in November. I won't buy on dips, but I will be ready to buy on an upside breakout," said Jonathan Barratt, managing director of Commodity Broking Services in Sydney.
Shanghai's benchmark third month contractrose 1.3 percent to 46,470 yuan, having slipped 2.8 percent on Monday.
Metals saw some support from a recovery in equity markets --the ASX 200 rallied 1.6 percentand the Nikkei added almost 1 percent .
But the Shanghai trader said more weakness was likely.
A rise in LME copper stocks, up 3,650 tonnes to 344,350 tonnes, undermined sentiment, and with inventories at their highest since mid-May and Chinese imports set to slow for the rest of the year, investors are worried that prices may have to correct further.
"We should expect a significant retracement. There is still lots of physical inventory in the domestic market -- maybe more than half a million tonnes in private warehouses," he said.
He estimated that in addition to the privately-held material, China's State Reserve Bureau probably held 1.5 million tonnes of copper cathode, bringing total stocks to around 2 million tonnes.
That contrasts with estimates by state-owned consultancy Antaike's estimates that stocks, including the SRB, were around 1.2 million tonnes. [ID:nHKG326569]
Nickelwas flat at $16,750, with prices are on course for a 12 percent monthly decline, their first since March.
"I am also getting more interested in nickel. It's had a larger correction than copper and been consolidating for a while, but I think it is closer to emerging from that," Barratt said.
Of the complex, only leadand tin are on course for a monthly rise, up 4.6 percent and 3 percent respectively. Both markets face supply disruptions. Zinc was flat on the month.
In the case of lead, a crackdown on pollution in China threatens hundreds of thousands of tonnes of capacity in the world's largest producer of the metal. [ID:nLEAD]
In tin, Indonesia, the world's biggest exporter of the metal, has arrested tin traders as part of a program to shut down illegal mining operations. Base metals prices at 0703 GMT Metal Last Change Pct Move End 2008 Pct chg 09 LME Cu 5955.00 -54.00 -0.90 3060.00 94.61 SHFE Cu* 46470.00 580.00 +1.26 23840.00 94.92 LME Alum 1821.00 -12.00 -0.65 1535.00 18.63 SHFE Alum* 14705.00 175.00 +1.20 11540.00 27.43 COMEX Cu** 270.35 -1.15 -0.42 139.50 93.80 LME Zinc 1881.00 3.00 +0.16 1208.00 55.71 SHFE Zinc 15090.00 295.00 +1.99 10120.00 49.11 LME Nickel 16750.00 0.00 +0.00 11700.00 43.16 LME Lead 2200.00 -7.00 -0.32 999.00 120.22 LME Tin 14275.00 -125.00 -0.87 10700.00 33.41 LME/Shanghai arb^ 1096 Dollar/yuan 6.8270 \ 6.8280 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month (Editing by Clarence Fernandez)
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