(Updates prices) By Pratima Desai LONDON, Sept 4 (Reuters) - Copper prices retreated onMonday as the market fretted over demand in top consumer Chinaand rising inventories in London Metal Exchange-registeredwarehouses, though losses were capped by a softer dollar. Traders said volumes were subdued because of the Labor Dayholiday in the United States. Benchmark copper on the LME was 0.5% down at $8,457a metric ton by 1605 GMT. Prices of the industrial metal toucheda four-week high of $8,599 on Friday after a survey showedChina's factory activity expanded in August. However, a slowdown in China's housing market is expected toremain a headwind for industrial metals for some time. "China's property sector is going to have a longer-termnegative impact on industrial metals," said Dan Smith, head ofresearch at Amalgamated Metal Trading.
"But Chinese imports for some metals have been quite strong,which suggests demand is holding up." Stocks of copper in LME warehouses are nearlydouble levels in the middle of July, having reached 107,425 tons for their highest since October last year.
Growing expectations that the U.S. Federal Reserve could beat the end of its monetary tightening cycle was weighing on theU.S. currency, weakness of which makes dollar-priced metalscheaper for holders of other currencies. On the technical front, copper faces upside resistancearound $8,590, where the 200-day moving average sits. Strongsupport comes in at $8,430-$8,440, between the 50-day and100-day moving averages. Elsewhere, large holdings of LME warrants andcash contracts have fueled worries about theavailability of lead on the LME market. This can be seen in the premium for the cash leadcontract over the three-month contract. At $27.50 a ton, thepremium is close to last week's two-month high of $28.40. Three-month lead was down 1.2% at $2,222 a ton. In other metals, aluminium ceded 1.2% to $2,209, zinc slipped 0.3% to $2,478, tin jumped 1.9% to$26,305 and nickel was down 0.3% at $21,030. Nickel prices on the Shanghai Futures Exchange rose to175,740 yuan, their highest in nearly four months, on concernover supplies after top exporter Indonesia delayed issuingmining quotas. (Reporting by Pratima DesaiAdditional reporting by Siyi LiuEditing by David Holmes and David Goodman)
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