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METALS-Copper edges lower on inventory rise, Chinese data

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* Copper dips by 0.3 pct, Zinc down 0.6 pct

* LME/ShFE arb: * Shfe tin stocks eclipse LME stocks: (Adds quotes on aluminium, updates prices)

By Eric Onstad

LONDON, July 10 (Reuters) - Copper slipped on Monday as rising inventories indicated healthy supplies, outweighing worries about possible strikes at mines in Chile.

Also weighing on the metals market was subdued inflation data in top market China as the economy loses momentum.

China's producer price inflation was unchanged in June amid lingering oversupply issues in the steel sector and as signs of economic weakness weighed on the outlook for prices. "The data was quite steady, giving policymakers in China a sweet spot ... to implement deleveraging (and) fine tuning of the economy," said Xiao Fu, head of commodity market strategy at Bank of China International in London.

Some investors have been worried that monetary tightening in China would hit economic growth, but Fu said the authorities there were wary about moving too fast.

"Overall, I think that there are some headwinds from a stronger U.S. dollar and deleveraging in China, so we are neutral to cautious about base metals in the second half."

* COPPER: London Metal Exchange benchmark copper was down 0.5 percent at $5,800 a tonne at 1417 GMT after small losses in the previous session. Copper prices have consolidated in a narrow range of $5,800-$5,965 since late June.

* COPPER INVENTORIES: Stocks in LME warehouses rose by 4,900 tonnes to 319,975 on Monday and have gained 32 percent since June 28, showing supplies are adequate.

* COPPER MINES: Losses in copper were limited by the prospect of strikes. Antofagasta in Chile has been facing possible strikes at two mines since last week. * ZINC: LME zinc shed 1.3 percent to $2,757. Alastair Munro, of broker Marex Spectron, said the metal has struggled to break $2,809/11 July highs and that he expects support into the $2,725 area.

* ALUMINIUM: LME aluminium dropped 0.9 percent to $1,913.50.

"A short-term pullback can't be ruled out first towards $1,912/1,910 ... with next support at $1,900," Stéphanie Aymes, head of technical analysis at Societe Generale, said in a note. "However this is just a consolidation within the overall up trend and eventually the up move is expected to persist."

* TIN: Tin stocks on the Shanghai Futures Exchange have surged in the past two months and now stand at about three times the volume of LME tin stocks. ( )

LME tin rose 0.8 percent to $19,730.

* DOLLAR: The dollar touched a two-month high against the Japanese yen on Monday after robust jobs data propped up U.S. Treasury yields. A stronger dollar erodes the purchasing power of buyers outside the United States for commodities priced in the U.S. currency.

PRICES: Lead gave up 0.6 percent to $2,282 and nickel dipped 0.1 percent to $8,910.


<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top base and precious metals analysis - GFMS Shfe tin stocks eclipse LME stocks LME/ShFE arb ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Melanie Burton; Editing by David Goodman and Susan Fenton)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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