June 1, 2015 / 10:31 AM / 5 years ago

METALS-Copper bolstered by fundamentals, strong dollar caps gains

* Shrinking China exports fuel growth fears
    * But China copper demand seen improving

 (Adds closing prices)
    By Pratima Desai
    LONDON, June 1 (Reuters) - Copper rose on Monday on
expectations of rising demand from top consumer China and lower
concentrate supplies, but gains were limited by the stronger
dollar.
    Analysts said demand from China was showing signs of
improvement, contrasting with an official Chinese manufacturing
PMI survey, released on Monday, which showed only a slight
increase in manufacturing activity last month and a drop in
exports. 
    Benchmark copper on the London Metal Exchange ended
at $6,024 a tonne, up from $6,015 at Friday's close.
    "We think there's more upside than downside for copper,"
said Vivienne Lloyd, metals analyst at Macquarie.
    "Copper demand is picking up in China and the mining side of
things has not performed so well this year. We're getting some
really strong signals from fabricators about demand from the
power sector," she said.
    Mining disruptions mean there is less concentrate available,
which means miners may not have to pay as much to get smelters
to turn it into copper.
    The fees paid by miners to smelters to process concentrates
have fallen 25 percent this year to $82 a tonne, "well below the
corresponding annual contract rate for 2015 of $107/tonne",
according to a Morgan Stanley note.
    A stronger dollar makes commodities priced in the U.S.
currency more expensive for non-U.S. firms.
    Three-month aluminium rose to $1,762 from Friday's
last bid at $1,740. Lead was untraded at the close, but
bid at $1,930, down from Friday's close at $1,950 and zinc
 ended lower at $2,165, from $2,188.
    Both lead and zinc in recent months have been boosted by
falling stocks in LME-approved warehouses. But inventories now
appear to be bottoming out and traders expect to see prices of
both metals fall further.
    Tin slipped to $15,370 from Friday's $15,600.
    Some expect tumbling stocks -- at 7,315 tonnes, the lowest
since 2008 -- to help boost tin prices.
    But Macquarie's Lloyd sees no signs of shortages.
    "China is getting a huge amount from Myanmar," she said.
"Indonesia has announced export restrictions, but honestly it
was too little, too late." 
    China's imports of tin ore from Myanmar have risen over the
last couple of years. The tally in the first four months of this
year was 89,000 tonnes, almost double the level in the same
period last year. 
    Nickel gained to $12,985 a tonne from $12,635.
        
    PRICES    
    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          
    Most active ShFE nickel          
    Three month LME tin             
    Most active ShFE tin                    
($1 = 6.1975 Chinese yuan)

 (Editing by David Clarke and Susan Fenton)
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