June 1, 2016 / 3:43 AM / 4 years ago

METALS--London copper hits one-week lows as China's factories stutter

* Cerro Matoso workers to strike from June 14 over pay

* Copper support seen at $4,550 as technicals darken - Triland

* Coming Up: Germany Markit/BME mfg PMI for May at 0755 GMT (Adds detail, updates prices)

By Melanie Burton

MELBOURNE, June 1 (Reuters) - London copper fell to its lowest in a week on Wednesday as a mixed outlook for China’s manufacturing growth in May put more pressure on prices already hit by a stronger dollar on expectations of a near-term U.S. rate rise.

Activity in China’s manufacturing sector unexpectedly expanded for a third straight month in May but growth remained weak as orders softened, suggesting the world’s second-largest economy is still struggling to regain traction.

“Overall, China’s May PMI measures ... were mixed, showing the challenges facing the economy. We expect the China government to continue implement supportive measures to protect growth and ensure economic recovery,” said Argonaut Securities in a note.

More broadly, factory activity in Asia failed to speed up in May as the region’s export-driven businesses struggled for new orders in a slow global economy.

Three-month copper on the London Metal Exchange fell 1.4 percent to $4,604 a tonne by 0814 GMT, extending a 0.5 percent drop from the previous session. It earlier hit $4,583.50 which was its lowest in a week, but still within its recent trading band of around $4,550 to $4,730.

Shanghai Futures Exchange copper slipped 1.7 percent to 35,190 yuan ($5,341) a tonne having also struck its lowest level in a week.

“If we break current support at $4,550, another test could bring back some nervousness ... One thing for sure is that copper needs something concrete before it can break any higher and the market is failing to provide that at present,” broker Triland said.

Adding to headwinds for metals was a strong dollar and expectations that brightening economic picture in the U.S. could herald a rate hike as soon as June.

U.S. consumer spending recorded its biggest increase in more than six years in April as households stepped up purchases of automobiles.

Worker’s at Chinalco’s Toromocho mine in Peru started a four-day strike on Tuesday to demand the reinstatement of a quarterly bonus, the union said. Toromocho produced 31,407 tonnes of copper in the first quarter and 5,500 tonnes of zinc, according to data from Peru’s Energy and Mines Ministry.

In news that could support nickel prices, union workers at Colombia’s Cerro Matoso mine, one of the world’s largest producers of ferronickel, will begin an indefinite strike on June 14 in protest of work and pay conditions, the union president said.

A Chinese plan to curb worsening soil pollution by 2020 and stabilise and improve soil quality by 2030 published Tuesday may impact lead and zinc production. The government will continue to eliminate outdated heavy metal capacity under the plan.


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 = 6.5891 Chinese yuan renminbi) (Reporting by Melanie Burton; Editing by Christian Schmollinger and Richard Pullin)

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