LONDON: Copper slipped on Monday as the higher dollar weighed on sentiment, but expectations of stronger demand from top consumer China and lower supplies of concentrate helped support.
China's official manufacturing PMI survey edged up to 50.2 in May, but the survey also showed shrinking exports, which fuelled worries about a prolonged economic slowdown.
A stronger dollar makes commodities priced in the US currency more expensive for non-US firms.
Benchmark copper on the London Metal Exchange traded lower at $5,985 a tonne in official rings from $6,015 at Friday's close.
"There is some wariness among the funds about aggressively shorting copper. We think there's more upside than downside for copper, said Vivienne Lloyd, metals analyst at Macquarie.
"Copper demand is picking up in China and the mining side of things has not performed so well this year. We're getting some really strong signals from fabricators about demand from the power sector."
Mining disruptions mean lower availability of concentrate.
The fees paid by miners to smelters to process concentrates have fallen 25 percent year-to-date to $82/t, "well below the corresponding annual contract rate for 2015 of $107/tonne", according to a Morgan Stanley note.
Three-month aluminium was untraded in the rings, but bid down at $1,733 a tonne from Friday's last bid at $1,740. Lead fell to $1,923 from Friday's close at $1,950 and zinc at $2,145.5 from $2,188.
Both lead and zinc in recent months have been boosted by falling stocks in LME approved warehouses. But inventories now appear to be bottoming and traders expect to see further price losses for both metals.
Tin was down at $15,400 a tonne from $15,600.
Some expect tumbling stocks -- at 7,315 tonnes, the lowest since 2008 -- to help boost tin prices.
But Macquarie's Lloyd sees no signs of shortages.
"China is getting a huge amount from Myanmar," she said. "Indonesia have announced export restrictions, but honestly it was too little, too late."
China's imports of tin ore from Myanmar have risen over the last couple of years. The tally in the first four months of this year was 89,000 tonnes, almost double the level in the same period of last year.
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