* China expected to deliver further easing
* Zinc backwardation slides (Adds closing prices, fresh comment)
By Pratima Desai
LONDON, May 11 (Reuters) - Copper slipped on Monday as doubts emerged about whether rate cuts in China would be enough to stimulate economic activity in the world’s largest consumer of industrial metals.
Benchmark copper was untraded at the close, but bid at $6,360 a tonne, down from Friday’s last bid of $6,385. The metal used in the power and construction industries is up about 20 percent since late January.
“It’s difficult to impress the base metals market, the easing was already priced in,” said Eugen Weinberg, analyst at Commerzbank. “We are likely to see further support from the PBOC (China’s central bank) and probably from China’s government.”
China cut interest rates for the third time in six months on Sunday in a bid to lower companies’ borrowing costs and stoke a sputtering economy that is headed for its worst year in a quarter of a century.
“Given recent changes to the rules regarding properties (in China), reduced down payments and the ability to flip properties after 2 years rather than 5, a rotation out of equity markets and back into property may also be on the cards,” Standard Bank said in a note.
Falling copper inventories, down about 25 percent to 183,304 tonnes, in warehouses monitored by the Shanghai Futures Exchange also help reinforce the idea of potentially strong China demand.
Three-month aluminium was bid at $1,878 a tonne, from Friday’s last bid at $1,889. Lead closed at $2,010 from Friday’s close at $2,040 and zinc at $2,305 from $2,355 on Friday.
Lead earlier fell to a three-week low of $2,007 and zinc tumbled more than two percent to $2,301.50, its lowest since April 30.
More availability of zinc for nearby delivery has also narrowed the premium for the cash contract over the three-month future to around $6 a tonne on Friday, from $33 earlier in the week.
“There was some fund buying this morning on zinc and lead, once this dried up the selling started,” a trader said. “Volumes are thin and that’s why the moves are exaggerated.”
Nickel ended at $14,280 from $14,300.
Tin closed down at $15,800 from from $15,900. Its weaker tone is due to trying and failing to break above the 30-day moving average on five consecutive days, traders said.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
$1 = 6.2082 Chinese yuan renminbi Additional reporting by Melanie Burton; Editing by Janet Lawrence