* Copper follows shares, oil higher as markets rebound

* Stainless steel mills seen buying nickel on dips - Triland

* U.S. consumer confidence, new home sales data at 1400

(Adds comment, updates prices, changes dateline from SYDNEY)

By Susan Thomas

LONDON, March 25 (Reuters) - Copper rose to its highest level in nearly a week on Tuesday, supported in part by prospects that big commodities consumer China will act to support its slowing economy, and ahead of key U.S. data later in the session.

Industrial metals followed other asset classes, including oil and shares, higher. MKTS/GLOB

Last week, copper fell to three-and-a-half-year lows, with traders watching developments in China's credit markets for directional cues, after a bond non-payment by a solar panel maker sparked fears defaults could grow.

Three-month copper on the London Metal Exchange CMCU3 rose 1.4 percent to $6,562 a tonne by 1200 GMT after closing the previous session at $6,473. It earlier rose to $6,580 a tonne, the highest since March 19.

Myrto Sokou, a senior research analyst at Sucden in London, suggested copper's move higher could be related to hopes of stimulus measures in China.

Weaker-than-expected manufacturing growth in China pointed to a contraction in the first three months of the year and raised market expectations of government stimulus to arrest a loss of momentum in the world's second-largest economy.

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Weakness in China worries investors because of its importance in the demand for raw materials.

"We have seen a correction higher in general in markets today. Yesterday we saw quite disappointing data from the euro zone and China and the market reacted to the tepid data," Sokou added.

"Today we have U.S. new home sales and consumer confidence - key economic data - so I guess investors are trying to position themselves ahead of their release."

Benchmark three-month nickel CMNI3 rose 1.4 percent to $16,340, and has gained more than 17 percent so far this year, almost retracing last year's 18 percent fall.

An Indonesian export ban that came into effect this year on nickel ore and aluminium feedstock bauxite has helped boost the price of nickel and underpin the aluminium price.

A drive by two big Russian producers of nickel and aluminium to get Indonesia to stick to the mineral ore export ban has added further support. ID:nL3N0M22BA

Aluminium producer United Company Rusal 0486.HK and Norilsk Nickel GMKN.MM delivered a blunt message to Indonesian officials: We will invest billions of dollars in smelters only if you ban bauxite and nickel ore exports. ID:nL3N0M22BA

The price of nickel, used to make stainless steel, is also getting an extra fillip from the prospect of sanctions on big producer Russia.

"Dips are being supported by stainless mills whose clients seem to have been caught out by the speed of this move up in the nickel price," broker Triland said in a note.

U.S. President Barack Obama and major industrialised allies have warned Russia it faced damaging economic sanctions if President Vladimir Putin takes further action to destabilise Ukraine following the seizure of Crimea. ID:nL6N0MI2ZM

Benchmark three-month aluminium CMAL3 was 1.3 percent higher at $1,754 per tonne, from $1,730 at the close on Monday. Aluminium has fared less well than nickel, falling around 2.6 percent so far this year because of a chronic market surplus.

Benchmark three-month tin CMSN3 rose 0.8 percent to $23,100 a tonne, from $22,925 at the close on Monday. The metal has risen around 3 percent so far this year.

Indonesia's top tin miner, PT Timah TINS.JK , said it expects the global tin supply deficit to grow to 20,000 tonnes in 2014 from 7,400 tonnes in 2013 as shipments suffer from rules making tin trading on an Indonesian bourse compulsory.

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PRICES

Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Three month LME tin CMSN3

($1 = 6.1888 Chinese Yuan)

(Additional reporting by Melanie Burton; Editing by Dale Hudson)

((susan.thomas@thomsonreuters.com)(44-7919627932)(44-207 542 6880)(Reuters Messaging: Reuters messaging: susan.thomas.thomsonreuters.com@reuters.net)) 

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