Shanghai copper limit down, dollar weighs on LME

SINGAPORE, April 27 - Shanghai copper futures fell by their 4 percent daily limit on Friday, after London copper lost 2.4 percent when support crumbled in the face of a firmer dollar.

The most active July copper contract on the Shanghai Futures Exchange fell 2,850 yuan in the morning session to a session low of 68,260 yuan ($8,835) a tonne.

At midday, it was at 68,370 yuan.

"Chinese investors lost confidence after the correction in London and lower domestic spot prices," analyst Pang Ying at Minmetals Star Futures said.

Shanghai spot copper was between 67,200 yuan and 67,500 yuan, down 2,500 yuan. Dealers expect weekly Shanghai exchange stocks to show a 700-tonne rise.

London Metal Exchange copper for delivery in three months fell $30 from the previous close, to $7,630. LME copper prices dropped on Thursday in volatile trading that also saw prices rally as high as $7,948.

"We saw a general easing in commodities on Thursday, which is probably attributable to the recovery in the dollar," Gerard Burg, analyst at National Australia Bank, said.

Gold also dropped on Friday, nearing its lowest in two weeks as the dollar firmed ahead of the release of U.S. economic growth data.

"The U.S. GDP numbers will be key. There are some pretty wide divergences of opinion out the where the market is heading," Burg said.

The euro was trading at around $1.36. The single currency climbed as high as $1.3667 on electronic trading platform EBS on Wednesday, near its record peak.

Dealers said holidays in Asia -- China is out for a week from Tuesday and Japanese markets are closed for 3 days -- meant activity was winding down with most investors prefering to establish a neutral position in case of fireworks next week.

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"I think LME copper will rise during the Chinese market break," Minmetals' Pang said.

"China's consumption of the metal is expected to increase this year compared with last year. The country's refined copper imports will rise this year also. Meanwhile, supply concerns continue," she added.

Shanghai's most active July zinc contract fell sharply, nearing its downside trading limit. At the break it was 2.7 percent or 885 yuan weaker at 32,420 yuan.

LME zinc was $20 softer $3,690 a tonne.

 Shanghai aluminium  was down 130 yuan at 20,000,
while LME aluminium was steady at $2,810. Dealers expect
Shanghai aluminium stocks to fall by around 16,000 tonnes.
 Metals prices at 0345 GMT
 Metal            Last      Net Change    Pct Move
 LME Cu         7630.00        -30.00       -0.39
 SHFE Cu*      68370.00      -2730.00       -3.84
 LME Alum       2810.00          0.00       +0.00
 SHFE Alu*     20000.00       -130.00       -0.65
 COMEX Cu**      348.70          0.00       +0.00
 LME Zinc       3690.00        -20.00       -0.54
 SHFE Zinc     32100.00       -830.00       -2.52
 LME Nickel    46850.00   &nbs