July 7, 2015 / 9:46 AM / in 5 years

METALS-Copper hits 6-year low on Chinese equities, Greek crisis

* Limited downside risk for some base metals

* Seasonal lull in copper demand weighs

* China stainless steel prices fall (Adds closing prices)

By Pratima Desai

LONDON, July 7 (Reuters) - Copper prices crashed to a six-year low on Tuesday as the dollar gained on the potential for financial instability created by the Greek debt crisis and Chinese equity market losses.

Other industrial metals followed. Nickel slumped 10 percent, its biggest one-day percentage fall since May 2010, to $10,440 a tonne, its lowest level since April 2009.

Aluminium touched a six-year low at $1,641 and zinc hit $1,925, its lowest since Dec. 2013.

Benchmark copper on the London Metal Exchange fell nearly 6 percent to $5,261.50 a tonne earlier in the session, its lowest since July 2009. The metal, used in power and construction, ended $5,339.5 from $5,590 at Monday’s close.

“Macro factors will continue to dominate until we get some clarity on Greece and we see signs of China’s equity market stabilising,” said Xiao Fu, head of commodity market strategy at Bank of China International.

“Copper has now moved to the bottom of my range. For some of the metals there is limited downside risk.”

A higher U.S. currency makes dollar-denominated commodities more expensive for holders of other currencies.

Greece faces a last chance to stay in the euro zone on Tuesday when its Prime Minister puts proposals to an emergency euro zone summit after Greek voters resoundingly rejected the austerity terms of a bailout deal.

Chinese stocks fell, taking little comfort from a slew of support measures unleashed by Beijing in recent days, and unnerved by Chinese Premier Li Keqiang’s failure to mention the market chaos in a statement on the economy.

China accounts for about half of global copper consumption estimated at around 22 million tonnes this year.

Copper is also expected to come under pressure over coming days from rising inventories. The latest data shows stocks in LME registered warehouses rose 7,675 tonnes to 329,175 tonnes.

“LME copper stocks are still 81 percent higher than at the start of 2015,” Capital Economics said in a note. “While we think some of the run-up in LME stocks has been the result of metal coming out of financing deals in China, the fact that stocks have remained high suggests only subdued demand.

Aluminium was untraded at the close, but bid at $1,665 from $1,695 on Monday. Zinc traded at $1,930 at the close from $2,014 and lead at $1,722 a tonne, from $1,766.

Lead earlier touched a near four-month low at $1,703.

Tin fell nearly 5 percent to $13,605. It closed at $13,850 down from $14,300.

Nickel closed at $10,660, from $11,700 on Monday.

“Stainless demand is one reason why nickel is falling, but there has been a lot of downside momentum for the funds to jump into,” a metals trader said.

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 (Additional reporting by Melanie Burton; Editing by David Evans and William Hardy)

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