May 30, 2017 / 10:53 AM / a year ago

METALS-Copper drifts lower as markets await Chinese factory data

* LME/ShFE arb: tmsnrt.rs/2oQ5nm2 (Updates with closing prices)

By Peter Hobson

LONDON, May 30 (Reuters) - Copper edged lower in quiet trade on Tuesday as the market waited for top metals consumer China to return from a public holiday and data on Wednesday that is expected to show a slowdown in Chinese industrial growth.

A weaker dollar helped London Metal Exchange copper recoup some of its early losses to finish down $1.50 at $5,656 a tonne.

“We’re just marking time waiting for the bigger events to emerge like China’s PMI and U.S. jobs data on Friday,” said Robin Bhar, head of metals research at Societe Generale.

CHINA HOLIDAY: The Shanghai Futures Exchange was closed for the Dragon Boat Festival and will reopen on Wednesday.

CHINA INDUSTRY: PMI data due on Wednesday is expected to show factory activity in China grew at its slowest in eight months, suggesting that manufacturing will be slower through 2017.

COPPER STOCKS: Prices were supported by a drop in on-warrant stocks available to the market in LME-registered warehouses, falling to 153,500 tonnes after 7,625 tonnes of cancellations. On-warrant stocks have decreased by a third since mid-April. MCUSTX-TOTAL

CHILE COPPER: Output in the world’s biggest producer fell 1.8 percent year-on-year in April to 429,241 tonnes. However a local recruiter said companies had stepped up their requests for engineers and other positions at early stage mining projects.

DOLLAR/MARKETS: The dollar weakened following weaker-than-expected U.S. data, making metals cheaper for holders of other currencies. Global stocks edged lower.

EUROPE ECONOMY: Euro zone economic sentiment suffered an unexpected decline in May, EU data showed.

ALUMINIUM PREMIUMS: A global aluminium producer has offered Japanese buyers a premium of $123 a tonne for July-September primary metal shipments, down 4 percent from the current quarter, sources told Reuters.

ALUMINIUM PRICES: Three-month aluminium ended down 1.3 percent at $1,926 a tonne. “If we lock in lower premiums in Japan, that means lower prices on the LME,” said ING analyst Hamza Khan, adding that prices could fall to $1,800 as China increases production in the third quarter.

OTHER METALS: Zinc finished down 0.5 percent at $2,625 a tonne and lead fell 0.8 percent to $2,105. Tin ended up 0.1 percent at $20,435 and nickel finished 0.4 percent higher at $9,115.

Additional reporting by Melanie Burton; Editing by David Goodman and David Evans

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