* Shanghai copper stocks up, premiums down * PT Timah will continue tin ingot shipments * Coming up: U.S. non-farm payrolls; 1230 GMT By Silvia Antonioli LONDON, Nov 4 (Reuters) - Copper rose more 1 percent on Friday as market sentiment improved as Greece dropped plans to hold a referendum on a bailout package, easing imminent worries over a disorderly default. Benchmark copper on the London Metal Exchange rose about 1 percent to trade at $7,987 by 1135 GMT, from a last bid of $7,910 on Wednesday. The metal, used in power and construction, earlier hit a session high of $8,059.75 per tonne. Copper rose about 20 percent from early October but is still more than 20 percent down from a record high of $10,190 hit in February. "The market is purely sentiment-driven at the moment; risk sentiment keeps swinging back and forward but volumes are pretty low," said analyst Andrey Kryuchenkov of VTB Capital. "People are hoping that...Greece will do whatever the EU proposes and that the debt crisis won't spread." Greece has dropped its plans to hold a controversial referendum on the country's euro zone membership, which had threatened to plunge the bloc into a crisis, the country's finance ministry said on Friday. The decision of the European Central Bank to cut interest rates in a surprise move on Thursday also supported market sentiment although worries about a slowing economy escalate. "The surprise rate cut by the ECB on Thursday is a two-edged sword for industrial metals," Credit Suisse said in a research note. "On the one hand, lower rates mean lower financing costs for industrial metals. On the other hand, it also signals that the economic slowdown is probably not over yet." The ECB's new President, Mario Draghi, said the euro zone could subside into a "mild recession" in the latter part of 2011. Investors were waiting non-farm payrolls data from the United States later on Friday for direction. "We expect 95,000 jobs were added in October; anything more than 100,000 will be very positive for the market," Kryuchenkov said. FRAGILE PROSPECTS Medium- and long-term prospects for copper remained intact, with strikes at some of the largest miners disrupting production in an already tight market and Chinese buyers expected to restock around the first quarter next year, analysts said. The union at Peru's Cerro Verde mine, which produces 2 percent of the world's copper, said late on Thursday it would attend talks brokered by the regional government on Friday but two legal procedures threatened to delay a resolution to a month-long strike. Also, Freeport McMoRan Copper & Gold's massive Grasberg mine in Indonesia is producing copper, gold and silver ore at only 5 percent of its full capacity. In the short-term though the picture looks a bit more fragile. The premium of spot copper in Shanghai has fallen $20 to $30 a tonne over the past two weeks, after some Chinese consumers slowed restocking as copper prices rose. China is the world largest consumer of copper and accounted for about 40 percent of global demand in 2010. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose 13.7 percent from last week after a significant decline the previous two weeks. Inventories of copper in warehouses monitored by the LME however, continued to fall and hit their lowest since late February at 417,850 tonnes. In other metals, tin was at $22,100 from $22,000 at the close on Thursday. PT Timah , the world's largest integrated miner, will continue to make tin ingot shipments in contracts agreed before an industry group halted all Indonesian exports from October, the firm said on Friday. Helping tin, 25 smelters, including PT Timah, agreed ealier this week to maintain a self-imposed tin ingot shipping ban until the end of December, as they look to support benchmark prices. Aluminium was at $2,159.75 from $2,146, while zinc , used in galvanizing was at $1,966 from $1,970 Thursday's close. Battery material lead was at $2,049 from $2,035 and nickel was at $18,715 from $18,420. Metal Prices at 1136 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 361.95 3.10 +0.86 444.70 -18.61 LME Alum 2160.00 14.00 +0.65 2470.00 -12.55 LME Cu 7982.50 97.50 +1.24 9600.00 -16.85 LME Lead 2051.50 16.50 +0.81 2550.00 -19.55 LME Nickel 18711.00 291.00 +1.58 24750.00 -24.40 LME Tin 22000.00 0.00 +0.00 26900.00 -18.22 LME Zinc 1965.00 -5.00 -0.25 2454.00 -19.93 SHFE Alu 16380.00 240.00 +1.49 16840.00 -2.73 SHFE Cu* 59360.00 2560.00 +4.51 71850.00 -17.38 SHFE Zin 15550.00 505.00 +3.36 19475.00 -20.15 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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