Bareksa.com - London copper slipped on Tuesday from its highest close in nearly three weeks, easing after three days of gains, with only a weaker-than-expected June European manufacturing survey denting encouraging global growth prospects.

Global manufacturing activity appeared to accelerate in June, buoyed by a return to growth in China and Japan and the fastest expansion in the U.S. factory sector in more than four years.

But the euro zone's private sector expansion unexpectedly slowed, even though companies are still cutting prices to drum up business.

Still, tight supply and decent consumption from top user China were helping to shore up copper prices, even in the wake of a metals financing scandal at a Chinese port that has curbed financing deals and is expected to erode imports, analysts said.

"We would have expected prices to come off more substantially as these financing deals unravel," analyst Matt Fusarelli of AME Group in Sydney said.

"It's showing that demand is not that bad."

China accounts for some 40 percent of global refined copper demand.

Three-month copper on the London Metal Exchange slipped by 0.3 percent to $6,866.75 a tonne by 0723 GMT, after rising in the previous session.

The most-traded August copper contract on the Shanghai Futures Exchange was last up 0.2 percent at 49,400 yuan ($8,000) a tonne, having hit a fresh four-month peak of 49,690 in overnight trade.

Shaken by a fraud investigation into metal financing in the world's seventh-busiest port, banks and trading houses have been made painfully aware of the risks they face storing commodities in China's sprawling warehouse sector.

Reflecting a dearth of refined supply, the global world refined copper market showed an 83,000 tonne deficit in March, compared with a 2,000 tonne surplus in February, the International Copper Study Group (ICSG) said in its latest monthly bulletin.

The yawning deficit was partly due to production problems at Chinese smelters, although the addition of another 1 million tonnes of capacity towards year end should swing the market back to balance, JP Morgan analysts said in a note.

On LME nickel which has held gains of 24 percent this year on the back of a ban on Indonesian ore exports, broker Triland said, "a growing proportion of participants seem to feel that the major moves are now fully factored in the price."

In news, the U.S. commodities regulator will have to carry out a review of metals warehousing if a bill before the U.S. House of Representatives is passed, the latest sign of intensive political pressure in the United States over the controversy at the London Metal Exchange. (Source : Reuters)