Updates prices at 1600 GMT

By Eric Onstad

LONDON, May 28 (Reuters) - Copper rebounded on Thursday on a report 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.

There was no immediate confirmation of the report by Axios, which said President Donald Trump still needs to give final approval to the agreement.

Three-month copper on the London Metal Exchange CMCU3 gained 1.2% to $13,696 a metric ton by 1600 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. MKTS/GLOB 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 0.9% to $6.43 a lb, bringing the premium of Comex over LME copper to 3.5% or $479 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.

"Copper prices are finding support from tariff-driven trade flows, as material is increasingly redirected into the U.S. ahead of potential policy changes, tightening availability in other regions," said Ewa Manthey, commodities strategist at ING.

LME lead CMPB3 rose 0.5% to $2,016.50 a ton, reversing earlier losses after LME inventory data on Thursday showed inflows of nearly 30,000 tons of metal into warehouses in Taiwan. MPBSTX-TOTAL

LME aluminium CMAL3 gained 0.6% to $3,658 a ton, nickel CMNI3 added 0.6% to $19,065, zinc CMZN3 rose 1.2% to $3,553 and tin CMSN3 advanced 1.6% to $55,250.