HANOI, June 2 (Reuters) - Copper dipped on Wednesday, hit by signs of weakening demand in top consumer China, while a firmer dollar made greenback-priced metals more expensive to holders of other currencies.
The most-traded July copper contract on the Shanghai Futures Exchange closed down 0.4% at 73,680 yuan ($11,531.24) a tonne, while the three-month copper on the London Metal Exchange dipped 0.1% to $10,235 a tonne by 0704 GMT.
Yangshan copper premium SMM-CUYP-CN fell to $30.50 a tonne, its lowest since February 2016, indicating weakening demand for imported metal into China as high copper prices deterred downstream consumption.
The dollar clung to small gains from overnight as a pick up in U.S. manufacturing kept bets alive for a quicker normalisation of Federal Reserve policy.
“China’s demand could decelerate amid tightening financial condition and slowing credit growth, but this could be mitigated by strong demand from rest of the world,” ANZ analyst Soni Kumari said.
Supply threats at BHP’s copper mines Escondida and Spence mines and at Brazilian miner Vale its Sudbury, Canada copper-nickel mine lent the red metal some support.
“We see many unknown factors impacting the supply side of balance and until the market gets some clarity around it, we expect prices to hold up well,” she said.
* LME zinc rose 1% to $3,094 a tonne while lead fell 0.5% to $2,208.50 a tonne. In Shanghai, aluminium declined 0.8% to 18,605 yuan a tonne, lead shed 1.3% to 15,350 yuan a tonne while ShFE zinc advanced 1.3% to 23,140 yuan a tonne.
* Russia’s industry ministry has held preliminary discussions with metals producers about buying their products for the state stockpile, the ministry said on Tuesday.
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$1 = 6.3896 yuan Reporting by Mai Nguyen; Editing by Sriraj Kalluvila, Rashmi Aich and Uttaresh.V