June 21, 2016 / 3:38 AM / in 4 years

METALS-London copper slips on worries about global oversupply

* China copper exports surge by 256 pct to near 85,000T in May

* China spot metal processing fees climb, more refined output seen

* Coming Up: China commodity trade data breakdown (Adds comment, detail; updates prices)

By Melanie Burton

MELBOURNE, June 21 (Reuters) - London copper slipped on Tuesday, as worries about global oversupply eclipsed support from a softer dollar and polls suggesting that Britain will remain in the European Union.

China’s copper imports jumped by 15.9 percent to 319,255 tonnes in May, data from the country’s General Administration of Customs showed. But copper exports surged by 256 percent on the year to 84,959 tonnes.

“It’s in the context of very strong copper flows earlier this year,” said analyst Dan Morgan of UBS in Sydney.

“Year-to-date to April, refined metal imports were up 27 percent year on year, and I don’t think consumption has been running as hot. We’ve been looking at copper end-use demand as being not great for the past few months,” he said.

“This is not sustainable because China is a net importer of copper.”

Copper stocks held in London Metal Exchange warehouses in Asia are set to jump by around 50 percent next month, as the metal is shifted out or diverted away from top consumer China, industry sources said last week.

Three-month copper on the London Metal Exchange slipped 0.6 percent to $4,617 a tonne by 0751 GMT, paring a 2 percent gain in the previous session.

Shanghai Futures Exchange copper trimmed early gains to 0.3 percent, at 35,570 yuan ($5,409) a tonne.

Two of the latest polls released over the weekend showed the “Remain” camp in the lead, reversing a recent rise in support for Britain pulling out of the European Union and prompting a rally in global equities, commodities and the pound on Monday.

That eroded demand for the dollar as a safe-haven currency and metals were supported on the softer dollar as they become cheaper for other currency holders.

“The positive risk-on environment continues to push commodities higher. The sustainability will be dependent on whether fundamentals remain supportive,” said ANZ in a research note.

China’s copper production may rise yet further as fees that miners pay smelters to process spot metal continue to climb, said Hong Kong-based broker Argonaut Securities in a note.

Investors remain wary ahead of Thursday’s Brexit vote, as well as Federal Reserve chief Janet Yellen’s two-day testimony before Congress which starts later on Tuesday, in which she might offer clues on the timing of the central bank’s next interest rate increase.

In news, Russian aluminium giant Rusal Plc may reduce its output capacity by 200,000 tonnes if aluminium prices fall below $1,500 per tonne, RIA news agency quoted Chief Executive Vladislav Soloviev as saying.

LME aluminium traded little changed at $1,631.50 a tonne.

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 = 6.5759 Chinese yuan Reporting by Melanie Burton; Editing by Christian Schmollinger and Subhranshu Sahu

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