* Copper falls to lowest since May 3, then rises * Tight supply offsets deepening slowdown in Asia economies * Trading muted due to holiday in China By Susan Thomas LONDON, June 12 (Reuters) - Copper rose off its lowest level in almost six weeks on Wednesday on tightening supply, but a deepening economic slowdown in big commodities consuming nations in Asia limited gains. Export growth throughout Asia has sagged in recent months on slackening demand from the United States, Europe and China, while leading indicators are also pointing to weaker factory activity in the coming months. Heavy stock market and currency falls in Southeast Asia this week have underlined the risks as investors grow nervous that the U.S. Federal Reserve may taper its quantitative easing policy that has fuelled a surge of credit in the region. Those fears sparked selling of stocks, bonds and commodities on Tuesday. Some of those losses were recouped on Wednesday. "Copper is caught between the clear tightening in the supply fundamentals and the significant deterioration in sentiment across the developing world," Natixis analyst Nic Brown said. "It's no surprise to me that the market has no clue which way is up. It's not obvious." Three-month copper on the London Metal Exchange rose 1 percent to $7,142 per ounce by 1027 GMT, after earlier falling to $7,020, its lowest level since May 3. It is down 11 pct so far this year. But trading was muted, with China markets closed for a public holiday this week until Thursday, when investors there will have their first chance to react to import and export figures that were released over the weekend. "There will certainly be a reaction, in quite what direction remains to be seen," Brown said. "It's entirely possible that the Chinese will come in, see copper back at around $7,100 or lower, and say 'we want some of that'." In a negative for the copper price, Rio Tino plans to start exporting copper from its giant Oyu Tolgoi mine in Mongolia on Friday. In the first ten years, annual output at Oyu Tolgoi is expected to average 330,000 tonnes. But that could be outweighed by disruptions and accidents at copper mines, including a stoppage at the world's second-largest copper mine, which are likely to wipe out an expected small surplus of copper this year. The three-month stoppage at Freeport McMoRan Copper and Gold Inc's Grasberg operation in Indonesia after a fatal accident last month will cut around 125,000 tonnes of copper, or half a percent, from global supply. Also, India's top copper smelter is preparing to reopen, potentially adding to the squeeze on concentrate supply. The smelter will only operate until the second week of July, however. Metal Prices at 1111 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Pct Move End 2012 Ytd Pct move COMEX Cu 3.21 0.01 +0.38 365.25 -99.12 LME Alum 1877.25 -62.75 -3.23 2073.00 -9.44 LME Cu 7104.25 39.25 +0.56 7931.00 -10.42 LME Lead 2130.00 13.00 +0.61 2330.00 -8.58 LME Nickel 14356.00 -179.00 -1.23 17060.00 -15.85 LME Tin 20375.00 -150.00 -0.73 23400.00 -12.93 LME Zinc 1854.00 2.00 +0.11 2080.00 -10.87 SHFE Alu 14940.00 15.00 +0.10 15435.00 -3.21 SHFE Cu* 53330.00 -30.00 -0.06 57690.00 -7.56 SHFE Zin 14820.00 5.00 +0.03 15625.00 -5.15 ** 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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