METALS-Copper slips from near 2-week high on China demand worry
(Adds official prices)
* Dollar rallies vs currency basket, weighs on copper
* Shanghai bonded copper premiums soar to $200
* Coming Up: U.S. Factory orders at 1400 GMT
LONDON, July 2 (Reuters) - Copper slipped on Tuesday from a near two-week high in the previous session as a stronger dollar weighed on the price and investors remained concerned about economic prospects in top metals consumer China.
The dollar hit a four-week high against the yen and rose against a basket of currencies on the prospect of U.S. jobs data later this week fuelling expectations the Federal Reserve will scale back stimulus.
A stronger dollar makes dollar-priced metals costly for non-U.S. investors.
Three-month copper on the London Metal Exchange traded down 0.49 percent to $6,945 a tonne in official midday rings, bringing losses for the year so far to around 12 percent, and reversing the previous session's 3.4 percent rally.
A forecast from the VDA industry group of a fall in new car sales this year in Germany, Europe's largest auto market, did little to boost risk appetite for metals, although recent factory surveys showed that contraction across the euro area is stabilising.
Monday's factory surveys from the U.S., Britain and Japan were upbeat, but the latest reading from China showed factory activity slowed to multi-month lows as demand dried up from customers at home and abroad.
China is the world's top metals consumer, accounting for 40 percent of global copper demand.
"Concerns about China are worrying, especially as regards liquidity, (and) on the supply side things are improving. That said, metals have really priced in most of the negative news, so nearer term, we could see a bit of a short-covering bounce," Credit Suisse analyst Karim Cherif said.
Markets awaited U.S. non-farm payrolls data for June, which is due on Friday, for signals about the health of the world's largest economy and hints on when the Federal Reserve may begin to taper off its supportive bond-buying programme.
On the plus side for copper, the premium for cash copper versus the three month price <CMCU0-3> rose to $18.00, its highest point since mid-July 2012, which indicated a squeeze on near-term supplies.
In Shanghai, meanwhile, copper drew some support from a flurry of demand for financing purposes in China.
Some trading companies have been importing metal before selling it onto the domestic market in return for cash, pushing up premiums for copper in bonded zone stores and underpinning prices.
Bonded copper premiums in China have soared to $190-$210 above LME copper prices from $140-$155 a month ago. (http://www.shmet.com/)
Also Chinese stock markets have steadied in recent days as investors, spooked by last month's cash crunch, took heart from official reassurances of ample liquidity in the financial system.
"We believe there will be a series of relief rallies, with (metals) prices looking near the bottom, but any upside will be short-lived given the weaker outlook on China," ANZ said in a note.
Aluminium traded up 0.57 percent at $1,838 a tonne in rings, zinc traded down 0.11 percent at $1,888 a tonne, while lead was last bid up 0.46 percent at $2,097 a tonne.
Tin traded up 1.50 percent at $20,270 a tonne, while nickel was last bid up 0.07 percent at $13,975 a tonne.
(Additional reporting by Melanie Burton; Editing by Anthony Barker)