METALS-Copper slides on weak U.S. data, stronger dollar

* U.S. manufacturing data hits metals sentiment

* Strong dollar weighs on prices

* Aluminium production restarts threaten prices

(Adds comment, details, updates prices)

By Rebekah Curtis and Maytaal Angel

LONDON, June 15 (Reuters) - Copper prices slid on Monday,
retreating from last week's rally, after weak U.S. manufacturing
data strengthened the dollar and signalled to traders that
demand remains weak.

Nickel, zinc and lead prices tumbled more than 6 percent
after the U.S. data showed the slumping factory sector in New
York state shrank at a more severe rate in June than the
previous month.[ID:nN15768]

Copper for three-month delivery MCU3 on the London Metal
Exchange closed down at $5,006 a tonne from $5,230 on Friday.

"Prices were looking over-extended and we were looking for a
pullback over the summer," said Gayle Berry, an analyst at
Barclays Capital.

"Probably what we are seeing today is a bit of a correction
from those extremely big gains, sparked by the data."

The U.S. manufacturing figures also helped the dollar extend
gains made earlier on weekend comments by Russia's finance
minister that the U.S. currency's role as the world's main
reserve currency is unlikely to change in the near future.
[ID:nFCA000184]

A stronger dollar makes metals priced in the U.S. currency
more expensive for holders of other currencies. [USD/]
"The dollar will keep on giving metals direction," said
Standard Bank analyst Leon Westgate, adding that the seasonal
lull in metals demand would mean the market would look to the
dollar for direction.

Copper, used in power and construction, hit an eight-month
high of $5,388 a tonne last Thursday on a slew of improved
economic data, but analysts say fundamentals remain weak.

It has risen more than 60 percent this year in a rally
sparked by increased demand from China. But this demand, which
appears to have been based largely on stockpiling by the world's
top copper consumer, seems to be tailing off.

"In fundamental terms, the recovery had been very largely a
Chinese story," said Stephen Briggs, a commodities strategist at
London's RBS Global Banking & Markets.

ALUMINIUM LOOKING WEAK

Aluminium MAL3 ended at $1,609 from $1,644.

From a fundamental perspective aluminium looks weak. Despite
a handful of drawdowns in the past two weeks, stocks are around
record levels above 4.27 million tonnes.

A series of potential production restarts in China threaten
to add further pressure to the over-supplied market.

May output data from China showed aluminium production up 14
percent at 999,300 tonnes, though still short of last August's
peak of 1.18 million.

Zinc MZN3 fell more than 7 pct to $1,565 and ended at
$1,575 from $1,690. Weighing on the metal, inventories rose
1,725 tonnes, to 331,700 tonnes.

Battery material lead MPB3 sank nearly 8 percent to
$1,630, matching the low on June 8. It ended at $1,677 from
$1,780, while steel making ingredient nickel MNI3 fell over 6
percent to $14,725 and closed at $14,775 from $15,690.

"I think the danger for nickel is that production is coming
back to the markets at a time when demand hasn't recovered
enough to absorb that additional supply," Berry said.

Tin MSN3 ended at $15,050 from $15,325 on Friday.

Worries about tin supplies eased due to a fall in a dominant
position controlling between 50 and 80 percent of cash warrants
on LME stocks <LME/WC>. The dominant position has held more than
90 percent in recent weeks.

"There is some evidence that whoever it is has started to
liquidate some of their position," said Dan Smith, analyst at
Standard Chartered.

Easing supply worries were reflected in the contango --
discount for cash material over the three-month contract -- of
$30 a tonne compared with a premium of $275 earlier this month.

Metal Prices at 1641 GMT

Metal Last Change Pct Move End 2008 Ytd Pct

move
COMEX Cu 227.20 -9.55 -4.03 139.50 62.87
LME Alum 1605.00 -39.00 -2.37 1535.00 4.56
LME Cu 5003.00 -227.00 -4.34 3060.00 63.50
LME Lead 1657.00 -123.00 -6.91 999.00 65.87
LME Nickel 14600.00 -1090.00 -6.95 11700.00 24.79
LME Tin 15045.00 -705.00 -4.48 10700.00 40.61
LME Zinc 1566.00 -124.00 -7.34 1208.00 29.64
SHFE Alu 13285.00 -175.00 -1.30 11540.00 15.12
SHFE Cu* 39770.00 -1580.00 -3.82 23840.00 66.82
SHFE Zin 13510.00 -320.00 -2.31 10120.00 33.50
** 1st contract month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07

(Editing by Peter Blackburn)