METALS-Copper on track for biggest monthly decline since March 2020

(Updates with official prices)

LONDON, June 30 (Reuters) - Copper on Wednesday was on track for its biggest monthly fall since March 2020 as a stronger dollar, the threat of tighter U.S. monetary policy and moves by China to keep a lid on prices pulled the metal from record highs.

Benchmark copper on the London Metal Exchange (LME) was up 0.8% at $9,405.50 a tonne in official trading but down more than 8% in June.

The metal was still up around 7% for the April-June quarter, however - the fifth consecutive quarter of rising prices - after reaching an all-time peak of $10,747.50 on May 10.

“A lot of funds have liquidated positions,” sapping momentum, said independent analyst Robin Bhar.

He said prices would be likely to rise again when the summer - traditionally a period of slow demand from industry - ends.

DEMAND: Many analysts say rising demand for copper in infrastructure and electrification will cause shortages and higher prices in the coming years.

FACTORIES: Growth in China’s factory activity dipped to a four-month low in June. Other data showed that in May, Japan’s industrial output fell by the most in a year and South Korea’s dipped from April.

DOLLAR: The dollar was heading for its biggest monthly rise since March after a hawkish shift in the U.S. Federal Reserve’s rates outlook. This hurt metals by making them more expensive for buyers with other currencies.

MARKETS: World shares were within a whisker of record highs.

CHINA: China is selling from state reserves of copper, aluminium and zinc as part of its pledge to control a surge in commodities prices.

FORECAST: Morgan Stanley forecast copper would average a little above $9,000 a tonne for the rest of the year.

LEAD SPREAD: The premium for cash lead over three-month metal on the LME surged this week to its highest since March 2020, suggesting tight supply. CMPB0-3

PRICES: Benchmark three-month lead was down 0.2% at $2,299.50 a tonne, aluminium was 0.7% lower at $2,535, zinc fell 0.1% to $2,948.50, nickel was 0.5% higher at $18,440 and tin rose 0.4% to $31,476.

All were on track for quarterly gains and all except zinc were set for monthly gains.

Reporting by Peter Hobson Additional reporting by Mai Nguyen Editing by Jane Merriman and Mark Potter