* Traders say prices likely to firm for end month, quarter * Red Kite reaps winnings from bearish bet on copper * Tin premiums perk up ahead of Indonesia export ban By Silvia Antonioli and Melanie Burton LONDON, Sept 30 (Reuters) - Copper fell on Friday and was on track for its worst monthly loss in three years as concerns that weak economic growth may flatten copper demand outweighed supply deficit expectations. Benchmark copper on the London Metal Exchange traded at $7,155 in rings from a close at $7,230 on Thursday. The red metal used in power and construction has lost nearly a quarter of its value this month, the biggest monthly fall since October 2008. "After a sharp decline in the last few days the market is now stabilizing," said RBS analyst Daniel Major. "Inventory data and other signs suggest that demand is resilient in China but there are still concerns of potential downside. The market supply situation is fairly supportive but it's really a question of whether China's economy will hold up." China's manufacturing sector contracted for a third consecutive month in September, suggesting that the world's second-largest economy is not immune to global headwinds, while factory inflation quickened. The final reading for HSBC's China PMI was stronger than the flash PMI reading published last week but still points to a slight contraction in China, the world's largest consumer of industrial metals. Supporting market sentiment, on Thursday Germany approved a beefed-up euro zone bailout plan while positive U.S. jobless data also lent some cheer to the gloomy markets. On the LME floor, traders said that prices were like to stay firm and even rally later in the day for end month valuation purposes. Adding some support to copper, workers at Freeport-McMoRan's Cerro Verde mine in Peru went on strike for better pay on Thursday, but the company said there was no disruption from the mine that supplies 2 percent of the world's copper. News a large metals hedge fund has been bearish on copper may temper bullish sentiment that usually dominates the yearly industry event, which is being held next week in London. The $1 billion Red Kite Metals fund has returned close to 20 percent for each of the past two months as copper prices fall to their lowest in a year. ? For an advisory on LME week events, see TIN PREMIUMS SURGE Physical premiums for tin have jumped after Indonesian smelters agreed on a full export ban from Oct. 1 following tin's steep price correction this month. But smelters may have to remain shuttered for an extended period before igniting a strong price response, said Standard Bank in a note. "Even assuming a double dip recession doesn't send consumers scurrying for cover, LME inventories may have to decline significantly before we see a strong and sustained price reaction," it said. "On that basis, Indonesian smelters may have to prepare for an extended shutdown period." Tin stocks stand at MSN-STOCKS 21,350 tonnes, of which roughly one-quarter is tagged for out-bound shipment and unavailable to market. Three month tin was untraded in rings but bid at $20,850 from $20,675. Battery material lead traded at $2,036 from $2,020 and nickel was at $18,300 from $18,670. The International Nickel Study Group (INSG) expects the global nickel market to be in a surplus of around 70,000 tonnes next year after a surplus of about 30,000 tonnes this year. Aluminium was at $2,242 from $2,248, while zinc , used to galvanize steel was at $1,925 and flat from Thursday's close. Metal Prices at 1223 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2010 Ytd Pct move COMEX Cu 322.85 -1.35 -0.42 444.70 -27.40 LME Alum 2241.25 -6.75 -0.30 2470.00 -9.26 LME Cu 7146.00 -84.00 -1.16 9600.00 -25.56 LME Lead 2032.00 12.00 +0.59 2550.00 -20.31 LME Nickel 18300.00 -370.00 -1.98 24750.00 -26.06 LME Tin 20600.00 -75.00 -0.36 26900.00 -23.42 LME Zinc 1928.25 3.25 +0.17 2454.00 -21.42 SHFE Alu 16640.00 165.00 +1.00 16840.00 -1.19 SHFE Cu* 54790.00 2190.00 +4.16 71850.00 -23.74 SHFE Zin 15400.00 715.00 +4.87 19475.00 -20.92 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07 (Reporting by Silvia Antonioli; editing by William Hardy)

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