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(Repeats story that ran late on Tuesday, with no changes to text)
* Unsure about China's demand & credit conditions, users wait for lower prices
* SE Asia banks tightening lending this year to copper importers -sources
* No evidence of widespread unwinding of China financing deals - traders
By Melanie Burton
SYDNEY, March 18 (Reuters) - Asia's copper consumers are holding off on fresh purchases due to sluggish demand for the metal and expectations that tightening credit in top user China will push prices down further from the current three-year lows.
The subdued appetite for copper reflects unease about slowing growth in China and uncertainty about any widespread unravelling of copper-financing deals there. It suggests that prices have further to fall.
China consumes around 40 percent of the world's copper, and analysts estimate at least half of its imports are for financing deals where the metal is resold in domestic markets to raise cash for more lucrative investments such as property.
The sliding prices did encourage a flurry of enquiries in Asia and some bookings, but pent up demand seems to have been met and new buying has more or less dried up now, industry executives said.
"Our customers will wait till it falls further now, unless they run out of stock and they need physical copper," said a source at an Australian copper products manufacturer which supplies builders of infrastructure projects in Southeast Asia.
"I'm sure for our customers their requirements are met for the next one-two months," said the source, who declined to be named because it was against company policy.
London copper
"Our customers are taking a wait-and-see attitude, and purchasing just what they need," said the head of procurement at a large Asia-based cable manufacturer.
"They are not sure about the copper price, and are afraid that it might keep falling, so they would like to take a hand-to-mouth attitude," the cable firm source added, declining to be named because it was against company policy.
Banks in South East Asia have been more circumspect this year when lending to copper importers, sources said.
"Most banks, even if they hedge are getting a bit more cautious, primarily because banks don't make money by liquidating," said a Singapore-based banking executive.
And reflecting poor physical uptake of the metal, premiums paid over London prices by buyers have softened.
Premiums for copper in-warehouse Malaysia and Singapore have fallen to around $75 and $100, respectively, from around $150 at the start of the year.
"Demand is still poor, people are nervous," said a physical trader in Singapore.
"Unlike before, in December and January, when there was huge Chinese buying, that is completely absent. I haven't seen an increase in other buys (elsewhere in Asia)," the trader said.
China's economy slowed markedly in the first two months of the year, with growth in investment, retail sales and factory output all falling to multi-year lows. And copper inventories in warehouses monitored by the Shanghai Futures Exchange (ShFE) has continued to rise, hitting 213,297 tonnes last week, their highest since May last year.
SPECULATIVE SELLING
At least one U.S. scrap copper trader has suffered "large" losses after a buyer in China defaulted on a deal this month, one of the first signs that sinking prices and tightening credit are taking a toll on the physical market.
But there was no evidence of large-scale unwinding of copper financing deals, and the liquidation was due to a bearish economic view and short selling by Chinese speculators, traders said.
In China itself, price expectations appear to be mixed. Premiums for copper held in Shanghai's bonded warehouses dropped $5 from last week to $120-$140 and compared to $160-$180 at the end of February.
However, appetite in China's local market appeared to be improving, as prices for physical copper swung to a premium against the front-month ShFE price last week from a discount for most of the past month.
End-users have increased purchases of spot copper in the local market and were trying to buy shipments for delivery in April to June from smelters, two trading sources said.
"If the price is considered stable, many end-users would start building stocks given prices are low now," a trader for a large user of refined copper in China said. He added, however, that the firm did not build stocks on expectation copper prices could fall further.
(Additional reporting by Polly Yam in HONG KONG; Editing by Muralikumar Anantharaman)
((melanie.burton@thomsonreuters.com)(+612 9373 1803)(Reuters Messaging: melanie.burton.thomsonreuters.com@reuters.net))
Keywords: COPPER CHINA/