MARKETS-METALS (UPDATE 3) * Aluminium tomorrow/next day delivery spikes to $20 * Trade thinned by holidays in Europe * Fresh cases of lead poisoning seen in China (Recasts, adds comments, details, pvs Singapore) By Melanie Burton LONDON, June 13 (Reuters) - Copper dropped half a percent to a three-week low on Monday, dragged down by signs of cooling in top consumer China amid holiday-thinned trade, but prospects for a demand pick-up in the second half kept sellers at bay. Three-month copper on the LME traded at $8,876 at 0958 GMT, compared with a close of $8,938 a tonne on Friday. It earlier fell to its lowest since May 24 at $8,864.75 a tonne but remained still some way from its May trough near $8,500 a tonne, which was its cheapest since early December. Markets continued to digest last week's Chinese trade data, which showed tepid copper imports, suggesting tightening measures have been successful in tempering demand. Chinese inflation figures will be closely watched this week for fresh light on whether Beijing is successfully taming inflation and for a clearer view on what is still a mixed picture for copper demand. "If the measures being taken in China are genuinely having an impact on inflation, then that's very good news for the metals," said analyst Nic Brown at Natixis. "Or you could look at it another way: Chinese authorities are still looking to clamp down on credit. If this is impacting industry and base metals but is not yet having a material impact on inflation, then that is not good news," he said. How hard Beijing taps its fiscal brakes to cool its economy is seen a key risk factor for metals consumption this year. Chinese consumer and producer price indexes are due on Tuesday. A London trader said "bits and pieces" of bargain hunting from the Far East had come into support copper prices, but that demand was muted due to holidays in much of Europe and a stronger dollar. "With much of Europe shut we expect the market to drift a little bit lower ... the question is how long it will be before the buyers step in," he said. "(On copper) I don't expect prices to fall back to $8,500, I think we will see support around $8,800." The euro eased against the dollar and fell towards record lows versus the Swiss franc on Monday as bickering between euro zone policymakers over the Greek debt crisis led investors to cut exposure. Most of mainland Europe is shut for a long weekend to celebrate Whit Sunday holiday. EX-CHINA COPPER On copper, Macquarie reiterated its expectations that demand will gain speed over the second half as purchases from China pick up, and as a result of surprisingly robust demand in other parts of the world. "Gradually over the next one to two months, we see Chinese imports rising given China could continue to de-stock at recent rates for an absolute maximum of three to four months before it runs out of copper," said Macquarie in a note. "This increase in imports very likely by end 3Q/4Q11 in the face of relatively strong ex-Chinese consumption is set to result in a drawdown in LME inventory through 2H11, so we are watching Asian cancelled warrants closely." Copper stocks fell from more than one-year highs, data showed on Monday, by 2,175 tonnes net, mostly due to a 1,475 tonne shipment out of South Korea's Busan. Aluminium traded at $2,596 a tonne, down from $2,619 a tonne on Friday. Premiums for material traded tomorrow against the next day spiked to $20 backwardation. The trader said this reflects a lack of liquidity due to the European holidays, with stragglers who did not roll their positions for Wednesday's prime June prompt date last week now scrambling to find material. Tin fell 2.5 percent to $24,700 from $25,400, hitting its lowest since December at $24,650 at one point given slow summer demand prospects and thin market conditions. Zinc, used in galvanizing, was at $2,234 from $2,260 on Friday's close, while battery material lead was at $2,512 from $2,545. It may find support if a fresh case of poisoning triggers another crackdown on smelters. Lead pollution from workshops in eastern China seriously poisoned 103 children and has affected hundreds of other residents in the country's latest case of unfettered industrial toxins, the official Xinhua news agency reported on Sunday. Nickel was at $22,366 from $22,850 also close to six-month lows below $22,203 a tonne. Metal Prices at 0957 GMT Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 401.80 -3.80 -0.94 334.65 20.07 LME Alum 2641.00 22.00 +0.84 2230.00 18.43 LME Cu 8900.00 -38.00 -0.43 7375.00 20.68 LME Lead 2515.00 -30.00 -1.18 2432.00 3.41 LME Nickel 22850.00 0.00 +0.00 18525.00 23.35 LME Tin 25350.00 -50.00 -0.20 16950.00 49.56 LME Zinc 2260.00 0.00 +0.00 2560.00 -11.72 SHFE Alu 17070.00 -65.00 -0.38 17160.00 -0.52 SHFE Cu* 67190.00 -400.00 -0.59 59900.00 12.17 SHFE Zin 17390.00 -150.00 -0.86 21195.00 -17.95 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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