METALS-Shanghai copper up 2.7 pct ahead of holiday

* Copper set for third quarterly rise, but slowest of 2008

* Shanghai open interest lowest since March ahead of holiday

* Lead set for strongest quarter since Q2 2007

* ShFE copper stocks seen down; concensus 3-4kT, maybe more (Adds forecast for Shanghai copper stocks, updates prices)

SINGAPORE, Sept 30 - Shanghai copper futures rose 2 percent on Wednesday and London metal also gained, but on the last day of trading before week-long Chinese holidays, the market will focus on closing positions ahead of the break.

Chinese markets will shut on October 1 for National Day and Autumn Festival celebrations and investors, recalling last year's tumultuous slide in London during the holiday, are closing out positions.

"Markets will be pretty thin for the next two weeks. The long Chinese holiday followed by London Metal Exchange Week will keep many people sidelined," said Edward Meir, an analyst at MF Global in New York.

"The market may get very volatile -- it won't take much to shift things -- the question is which way will it go. My feeling is that it could be lower. The dollar has slowed its downtrend and we are entering the usually weaker fourth quarter so it doesn't feel like it will have a pop."

Open interest across Shanghai copper futures was 329,000 lots, its lowest since March, and turnover is also down.

For a graphic, click: http://graphics.thomsonreuters.com/099/CM_SHFEOI0909.gif

Three-month copper on the London Metal Exchange rose $105 to $6,085 a tonne by 0627 GMT.

Copper, which has doubled in price this year, is heading for a 22 percent rise in the third quarter, its third in as many quarters, but its weakest performance of the year.

Shanghai copper futures added 2.7 percent to 47,710 yuan, on course for a 4 percent loss this month, its first since December, but a 16 percent quarterly gain.

"Trade is winding down," a dealer in Hong Kong said. "People are closing positions and packing up for the holiday. The huge fall last year is fresh in their memories and no one wants to get caught behind the eight-ball."

The exchange will relase its weekly metals stocks data on Wednesday rather than Friday due to the holiday, and traders are calling for a hefty decline.

Estimates varied from between a 3,000 tonne decline to 12,000 tonnes. The majority of views were for an fall at the lower end of the range. A fall would be the second in as many weeks.

"A big fall would certainly explain the rally in Shanghai copper and why it is seems to be pulling away from the other metals," a trader in Singapore said.

Last year, around the time of the Golden Week, copper prices in London started to tumble, sliding by a third in about two weeks and leaving Chinese investors in limbo as the market saw successive limit down moves, followed by one-day trading halts through much of October.

This year the trading bands have been widened, with the threshold set at 7 percent, rather than the usual 5 percent.

DATA DELUGE

Data from the United States showed stronger-than-expected U.S. home price data, mitigated by a drop in consumer confidence.

The next big-ticket U.S. data items include final GDP numbers for the second quarter, the Chicago purchasing managers' index later on Wednesday and on Friday, non-farm payrolls.

The market will also watch for Chinese purchasing manager numbers on Wednesday.

"There is a lot of data out this week. The macro numbers have been coming in mixed for the past week or two after a strong period," MF Global's Meir said.

"This week's numbers will set the tone for October. It could be time to put double options on either side the market. Volatility has been relatively low so options premiums will be down, but the chance for a big move in the next couple of weeks is great."

Lead rose $26 to $2,258 and is on its way towards a 33 percent rise in the third quarter, its biggest gain since the second quarter of 2007. Base metals prices at 0627 GMT Metal Last Change Pct Move End 2008 Pct chg 09 LME Cu 6085.00 105.00 +1.76 3060.00 98.86 SHFE Cu* 47710.00 1240.00 +2.67 23840.00 100.13 LME Alum 1860.00 8.00 +0.43 1535.00 21.17 SHFE Alum* 14795.00 90.00 +0.61 11540.00 28.21 COMEX Cu** 273.50 2.00 +0.74 139.50 96.06 LME Zinc 1898.00 15.00 +0.80 1208.00 57.12 SHFE Zinc 15225.00 135.00 +0.89 10120.00 50.44 LME Nickel 17135.00 -10.00 -0.06 11700.00 46.45 LME Lead 2258.00 26.00 +1.16 999.00 126.03 LME Tin 14400.00 0.00 +0.00 10700.00 34.58 LME/Shanghai arb^ 892 Dollar/yuan 6.8267 \ 6.8269 ** 1st contract month for COMEX copper * 3rd contact month for SHFE aluminium, copper and zinc ^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE third month