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METALS-Copper drifts lower as markets await Chinese factory data

* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm2 (Updates throughout, moves byline from Melbourne)

LONDON, May 30 (Reuters) - The price of copper fell on Tuesday in quiet trade as the market waited for top metals consumer China to return from a public holiday and data on Wednesday that is expected to show a slowdown in Chinese industrial growth.

A trader said copper was being pulled down by technical selling after it fell 1.2 percent on Friday, its biggest loss in three weeks.

"Copper is drifting lower, following on from Friday's weaker close .... It closed on the lows of the week, so technically that didn't look that good."

LME COPPER: Copper on the London Metal Exchange was down 0.4 percent at $5,633 a tonne at 1031 GMT, as trade resumed following public holidays in parts of Europe on Monday.

COPPER TECHNICALS: Support was at around $5,575 and then more strongly towards $5,450, copper's lowest so far this year, a trader said.

CHINA HOLIDAY: The Shanghai Futures Exchange was closed for the Dragon Boat Festival and will reopen on Wednesday.

CHINA INDUSTRY: PMI data due on Wednesday is expected to show factory activity in China grew at its slowest pace in eight months, signalling a cooldown in manufacturing will persist through 2017.

COPPER STOCKS: Prices were supported by a fall in on-warrant stocks available to the market in LME-registered warehouses to 153,500 tonnes after 7,625 tonnes of cancellations. On-warrant stocks have decreased by a third since mid-April. <MCUSTX-TOTAL>

CHILE COPPER: Companies have stepped up their requests for engineers and other positions at early stage mining projects in Chile, a local recruiter said on Monday, in a further sign of activity warming up in the industry.

MARKETS: European shares fell in early trading, while the dollar touched its highest since May 19. A stronger dollar makes metals more expensive for holders of other currencies.

ALUMINIUM PREMIUMS: A global aluminium producer has offered Japanese buyers a premium of $123 per tonne for July-September primary metal shipments, down 4 percent from the current quarter, sources told Reuters.

ALUMINIUM PRICES: Three-month aluminium was down 0.1 percent at $1,949 a tonne. "If we lock in lower premiums in Japan that means lower prices on the LME," said ING analyst Hamza Khan, adding prices could fall to $1,800 in the third quarter as China increases production.

PRICES: Lead was flat at $2,121.50 a tonne and tin was 0.1 percent lower at $20,405. Zinc was up 0.3 percent at $2,648.50 and nickel was 0.7 percent higher at $9,145.

(Additional reporting by Melanie Burton; Editing by Mark Potter)