June 26, 2015 / 9:40 AM / 5 years ago

METALS-Copper slips on fall in Chinese equities and Greek jitters

* Chinese shares post some of their heaviest losses in seven
    * Huge Chinese nickel imports not demand-driven -Natixis
    * Coming up: University of Michigan consumer sentiment, 1400

 (Updates with official prices)
    By Eric Onstad
    LONDON, June 26 (Reuters) - Copper and other base metals
fell on Friday after a rout in Chinese shares and worries about
Greek debt talks over the weekend.
    Shares in China, the world's biggest metals consumer, on
Friday posted some of their worst losses in seven years.
    "I certainly think the sharp drop in Chinese equities will
have a negative effect, and that is probably the main factor
today," said Nic Brown, head of commodities research at Natixis
in London.
     Three-month copper on the London Metal Exchange 
traded 0.5 percent down at $5,744 a tonne in official midday
activity after a small gain from the previous session.
    Prices were poised to log a weekly climb of nearly 2
percent, but were still facing a monthly loss of 4 percent.  
    LME aluminium dropped 0.8 percent to $1,710 a tonne
in official rings.
    Also weighing on the market were last-ditch efforts expected
on Saturday to avert a Greek debt default. 
    Losses in copper were modest, however, since some investors
saw early signs that Chinese stimulus measures may be feeding
into fragile support for the market, curbing the impact of a
seasonal slowdown in demand. 
   "Although the dollar has been strong, copper prices have been
relatively stable. That suggests that people are becoming more
optimistic," said Jonathan Barratt, chief investment officer at
Sydney's Ayers Alliance.
    Another sign of relative strength in copper was that buyers
in China's domestic market have this week paid the highest
premiums since January for spot refined copper. 
    LME nickel sagged 1.3 percent to $12,550 a tonne in
official rings, now teetering towards a six-year low of $12,205
struck in mid-April. Traders have been shipping metal to China
in the expectation that the ShFE will list a broader array of
brands for delivery against its new contract. 
    "For us, this refined metal arriving in China is purely and
simply a play related to the attempted squeeze that kicked off
in May. It's no reflection of stronger Chinese demand for
nickel," Brown said. 
    Backing up that theory, one Singapore-based trader noted a
narrowing gap in China between premiums for domestic and global
brands. "I don't think it's consumption related," he said.  
    Among other metals, zinc shed 0.5 percent to $2,025
a tonne in official trading, but other metals failed to trade in
official rings. Lead was bid 0.2 percent lower to $1,788
and tin was bid down 0.9 percent at $14,750. 
    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                    

 (Additional reporting by Melanie Burton in Melbourne, Editing
by William Hardy and David Goodman)
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