Recasts with report on Iran deal, updates prices at 1430 GMT

By Eric Onstad

LONDON, May 28 (Reuters) - Copper rose on Thursday on reports that the U.S. and Iran have reached a deal to extend their ceasefire and following news of fresh efforts by top metals consumer China to boost its economy.

According to the report by Axios, President Donald Trump still needs to give final approval to the agreement.

Three-month copper on the London Metal Exchange CMCU3 gained 0.8% to $13,633 a metric ton by 1430 GMT after slipping to its lowest level since May 21 at $13,464.

Earlier, prices had bounced off their intra-day low after sources told Reuters that China's central bank has instructed banks to boost lending this month, underscoring Beijing's continued efforts to support an economy squeezed by higher energy costs and stubbornly weak domestic demand.

Oil prices reversed course to trade lower and stocks turned positive after the Axios report said the U.S. and Iran reached a deal for a 60-day ceasefire extension and the start of talks on Iran's nuclear programme. O/R

Investors have been seeking to balance the potential of weaker metals demand, as the conflict cuts economic growth, against the prospect of copper shortages due to the lack of sulphuric acid.

U.S. Comex copper futures HGc3 rose 0.4% to $6.39 a lb, bringing the premium of Comex over LME copper to 3.4% or $463 a ton.

Traders have been steadily shipping copper to the U.S. ahead of a decision expected at the end of June about whether to impose tariffs on refined copper.

"Tariff expectations are once again pulling metal into the U.S., tightening availability elsewhere and adding another layer of distortion to the market," said Ewa Manthey, commodities strategist at ING.

LME lead CMPB3 fell 0.4% to $1,997.50 a ton after LME inventory data on Thursday showed inflows of nearly 30,000 tons of metal into warehouses in Taiwan. MPBSTX-TOTAL

LME aluminium CMAL3 rose 0.3% to $3,648 a ton, nickel CMNI3 gained 0.6% to $19,065, zinc CMZN3 rose 0.5% to $3,531 and tin CMSN3 gained 1.2% to $55,055.