METALS-Copper slips on growth concerns; eyes US data

LONDON, June 1 (Reuters) - Copper slipped on Wednesday on
signs of slowing factory activity in China and Europe and
extended losses after below consensus jobs data from the United
States reinforced demand worries.
    Benchmark copper on the London Metal Exchange traded at
$9,125 at 1331 GMT from a close of $9,220 a tonne on Tuesday,
when the metal used in power and construction hit $9,278.50 a
tonne, its highest in four weeks.
    "The fact that we're a little bit weaker is a reflection of
the weaker (manufacturing figures) which have ignited people's
concerns about a slowdown in activity in China," said analyst
Gayle Berry of Barclays Capital.
    "They were above expectations so the general feeling is that
you'll get another rate hike in June, so that is also making the
market a bit nervous."
    Chinese factories expanded in May at their lowest pace in at
least nine months, two surveys showed on Wednesday, reinforcing
evidence that the economy is slowing under the weight of
government credit curbs and power shortages.  
    China is the world's top consumer of base metals.
    "We're moving from what was a period of very fast expansion
in 2010 as economies went into recovery, into a more mature
phase where you'd expect to see rates of expansion slow. You
need... perspective when looking at these numbers," added Berry.
    Sentiment was also undermined by fresh signs of decline
among factories in the euro zone.
    However, the lower dollar was providing a cushion for
prices, said a trader who expects muted trade in Europe this
week with many nations off on holiday on Thursday.
    The dollar fell further after data showed U.S. private
employers added only 38,000 jobs in May, below expectations and
the lowest level since September 2010.
    The data doesn't bode well for Friday's non-farm payrolls
figures for the United States, analysts said.    News of the
magnitude 6.3 earthquake in Chile had little immediate impact on
copper prices.

    The Institute for Supply Management's May survey of U.S.
manufacturing and April construction spending are due at 1400
    "If the (manufacturing) numbers disappoint, we think
pullbacks could offer buying opportunities since we expect
activity to reaccelerate moving into Q3. We favour copper and
aluminium," Credit Suisse private banking said in a note.
     Stocks of copper in LME warehouses rose 3,075 tonnes to
above 470,000 tonnes for the first time in a year, highlighting
lack of demand in what is usually a peak season. 

    News that China will raise power prices for some consumers
has helped support aluminium prices this week.
    Energy accounts for about 35 percent on average of aluminium
smelting costs and China is the world's largest producer of the
metal used widely in the power, construction and packaging
    Three-month aluminium was at $2,668 from $2,677 on Tuesday.
Earlier on Wednesday it saw $2,684.75 a tonne, its highest since
May 5.
    Tin was at $27,450 from $27,940 while zinc, used in
galvanising steel, was at $2,246 from $2,266 on Tuesday's close.
    Battery material lead was at $2,509 from $2,521 and nickel
 was at $23,238 from $23,590.

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    Metal Prices at 1333 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in
 Metal            Last      Change  Percent Move   End 2010
  Ytd Percent
 COMEX Cu       413.45       -4.30     -1.03     444.70     -7.03
 LME Alum      2669.50       -7.50     -0.28    2470.00      8.08
 LME Cu        9180.00      -40.00     -0.43    9600.00     -4.38
 LME Lead      2506.50        1.50     +0.06    2550.00     -1.71
 LME Nickel   23395.00     -195.00     -0.83   24750.00     -5.47
 LME Tin      27895.00      -45.00     -0.16   26900.00      3.70
 LME Zinc      2240.00      -26.00     -1.15    2454.00     -8.72
 SHFE Alu     16850.00        5.00     +0.03   16840.00      0.06
 SHFE Cu*     68310.00     -260.00     -0.38   71850.00     -4.93
 SHFE Zin     17240.00     -100.00     -0.58   19475.00    -11.48
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07