* Analysts think China manufacturing contracted in July * Rio puts on hold Mongolia mine expansion * Investors cautious ahead of Fed meeting By Silvia Antonioli LONDON, July 30 (Reuters) - Copper fell to its lowest in almost three weeks on Tuesday as expectations of weak manufacturing data from top consumer China dimmed prospects for growth in metals demand. Benchmark copper on the London Metal Exchange (LME) fell almost 1 percent to $6,811 a tonne by 0914 GMT, after hitting a session low of $6,802.25. The metal is down 14 percent on the year. Investor sentiment turned negative on expectations that activity in China's vast manufacturing sector may have contracted in July for the first time in 10 months, a Reuters poll showed. A barometer of the manufacturing sector, the Purchasing Managers' Index (PMI), will be released on Thursday. A reading above 50 indicates expanding activity while one below it points to contraction. "Sentiment right now is not very much in favour of commodities. The whole industrial metals complex is under pressure and it is very much about China," Commerzbank analyst Eugen Weinberg said. China's July PMI is expected to produce the lowest reading since September 2012, he said. "It could be below 50, which would point to contraction of the economy and this would weigh especially on industrial metals given China's importance for these markets," Weinberg said. China accounts for about 40 percent of global copper consumption. Investors were also cautious ahead of a U.S. Federal Reserve meeting that may provide clues on the timing of a stimulus rollback, which could cut global commodities demand. BELOW THE SURFACE Still, signs of steady demand were seen in the physical markets, where premiums for copper in China's bonded zones have firmed to around $195 from $180 about two weeks ago, according to price providers SMM and Shmet. Premiums struck four-year highs of $210 at the end of June. Also reflecting increased physical demand, ShFE stocks fell to the lowest in more than 10 months, weekly stocks data showed on Friday. "Under the surface the situation is better than many fear: it is the sentiment that is dragging prices, not demand weakness, because the weakness is already priced in," Weinberg said. Copper prices should draw some support from news that Rio Tinto has put on hold a more than $5 billion underground expansion of its giant Oyu Tolgoi copper mine in Mongolia. But expectations still are of increasing copper supply in the next few years. "In terms of base (metals), the clear knock-on effect lies within the demand side of the market equilibrium, as supply continues to grow following a plethora of mining investment over the last decade," brokerage Marex Spectron said in a note. "Further, with global demand waning due to carry trade contraction and a weaker-than-expected underlying economy, the structural long side, beyond a short squeeze, cannot be seen as favorable over the longer term." In other metals, three-month aluminium was down 0.3 percent at $1,790, zinc fell 0.3 percent to $1,840.75 and lead dipped 0.7 percent to $2,050.75. Tin was down 0.9 percent at $19,750 and nickel fell 0.6 percent to $13,625.

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