UPDATE 3-Shanghai copper reverses losses; imports fall

(Adds China trade data, updates prices to close)

By Nick Trevethan

SINGAPORE, June 11 (Reuters) - Shanghai copper prices
reversed early losses, closing slightly higher after a big fall
in Chinese copper imports in May, while London futures held
steady and were expected to trade within a $200 range.

The most active Shanghai August copper SCFQ8 contract
rose 90 yuan to 60,050 yuan ($8,678) a tonne at the closing
bell.

China's imports of unwrought copper and semi-finished
copper products fell 19.2 percent on the month to 198,894
tonnes in May, customs data showed on Wednesday, setting the
scene for a fall in refined copper when final figures are
released later this month. [ID:nHKG330221]

"Cathode imports should be down, but concentrate imports
will remain at relatively high levels," analyst Yingxi Yu at
Barclays Capital said.

She added: "People are cutting back imports after losing
money on the LME-Shanghai spread."

This is making Chinese consumers more reliant on domestic
supplies and giving Shanghai metal a bit of a boost, dealers
said.

Metals shrugged off a 1.6 percent fall in Shanghai's equity
market .SSEC, following a 7.7 percent slide in the previous
session after Beijing ramped up bank reserve ratios by another
1 percentage point to try and choke off money supply and curb
inflation.

London Metal Exchange copper for delivery in three months
MCU3 rose $5 to $7,875 a tonne at 0750 GMT.

"Copper seems happy trading between $7,800 and $8,000.
People have been looking for a break after the swings in the
dollar and oil, and although we are seeing a lot of volatility,
it's pretty much stuck," an LME trader in Hong Kong said.

"If and when it finally breaks, it will be lower. I can't
see it going crazy on the upside. All the others are relatively
weak. Light consumer buying emerges in aluminium below $2,900.
Copper would need to pull back to $7,600 to spark some
interest."

Some support came from Peru, where around 800 workers at
Freeport McMoRan's Cerro Verde mine walked off the job in a
dispute over contracts. [ID:nN10362467]

Cerro Verde is expected to produce 200,000 tonnes of copper
in concentrate and around 100,000 tonnes from its SX-EW plant,
but Freeport said it did not expect any impact on production.

The gap in prices between the London and Shanghai copper
markets narrowed to 3,721 yuan from 4,235 yuan on Tuesday,
including Chinese value-added tax, well down from a record
6,549 yuan on April 18.

Shanghai aluminium SAFQ8 ticked up 55 yuan to 18,965
yuan, while LME metal MAL3 fell $10 to $2,945.

Alcoa Inc (AA.N: Quote, Profile, Research) declared force majeure on alumina
shipments from Australia after an explosion at Apache Energy's
(APA.N: Quote, Profile, Research) Varanus Island facility off Western Australia cut gas
supplies to the state by 30 percent.

"Alcoa's force majeure so far hasn't had impact on the
aluminium market. There's plenty of aluminium and alumina in
China, said Lin Hui, an analyst at Orient Futures Securities.

"Whether there will be significant impact depends on how
long the force majeure will last."

Alcoa said it was still receiving gas from its other
supplier, but the force majeure would shave 2-3 cents from its
second quarter profit per share.

The benchmark August zinc futures contract in Shanghai
SZNQ8 fell 35 yuan to 16,050 yuan and earlier hit a life-time
low for the third month contract at 15,775 yuan, under pressure
from weak domestic demand and arbitrage selling.

On Tuesday, zinc fell by its 4 percent daily limit as
selling in Shanghai pushed down domestic zinc prices to close
to the production cost of the metal in China.

LME zinc MZN3 fell $19 to $1,915.
Metal Prices by 0750 GMT:
Metal Last Change Pct Move End 2007 Pct chg
08
LME Cu 7875.00 5.00 +0.06 6670.00
18.07
SHFE Cu* 60050.00 90.00 +0.15 56880.00
5.57
LME Alum 2945.00 -10.00 -0.34 2403.00
22.56
SHFE Alum* 18965.00 55.00 +0.29 18180.00
4.32
COMEX Cu** 355.70 0.00 +0.00 304.10
16.97
LME Zinc 1900.00 -34.00 -1.76 2370.00
-19.83
SHFE Zinc 16050.00 -35.00 -0.22 18950.00
-15.30
LME Nickel 23300.00 -90.00 -0.38 26350.00
-11.57
LME Lead 1960.00 -5.00 -0.25 2550.00
-23.14
LME Tin 21100.00 -275.00 -1.29 16400.00
28.66
LME/Shanghai arb^ 3721
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month
($1=6.919 yuan)
(Additional reporting by Rujun Shen in Shanghai; Editing by
Ben Tan)