METALS-Supply bottlenecks spur copper to nearly two-week high
* Speculators' net short positions rise to 32,000 lots from 10,000
* Bottlenecks force Chinese copper importers to queue
* China's services sector expands modestly in June
LONDON, July 3 (Reuters) - Copper rose to its highest price in almost two weeks on Monday, spurred by bottlenecks in supply as well as stepped-up copper purchases by Chinese importers in June.
Copper prices have pared some of June's steep losses as mine shutdowns have combined with limited delivery from London Metal Exchange-registered warehouses to choke immediate supply.
Copper bucked the trend in other financial markets, with stocks in Europe sliding as deepening political turmoil in Portugal threatened to reignite the bloc's crisis.
Three-month copper on the London Metal Exchange was $6,920 a tonne in official rings, having earlier in the day reached $6,993.50, its highest level since June 19. It closed at $6,915 on Tuesday.
Copper prices lost more than 7 percent in June and are down more than 12 percent in the year to date.
"We had this long wave in which everyone was quite bearish about the outlook, panicking about China," Standard Chartered analyst Dan Smith said.
"I was in Hong Kong last week and the week before and I was arguing quite strongly that we're going to see high prices by year end. We've seen a decent bounce in copper in the last few days, in line with that view."
Smith sees copper at $7,000 plus before the end of the year, with Chinese base metals demand in reasonably good shape.
Also, China's copper importers are being forced by bottlenecks in the LME warehousing system to queue for deliveries of metal they have already bought, resulting in spot copper import premiums rising by a third since mid-June.
Reflecting this nearby physical tightness, cash copper in the futures market jumped in two days from a discount to its highest premium in nearly a year over three-month prices.
However, growth in China's services sector expanded only modestly in June, in a sign that the economy is cooling.
In the United States, data on Tuesday showed U.S. new motor vehicle sales in June were poised to record their strongest month in more than 5-1/2 years and factories posted a second straight month of gains in new orders in May, indicating some pick-up in economic activity.
Adding to the improving U.S. economic picture, home prices posted their biggest annual increase in more than seven years in May, other data showed on Tuesday.
In copper short selling, Macquarie said that over the past three weeks speculators' positioning had moved from net short 10,000 lots on June 11, to net short 32,000 lots on June 25.
"This has surpassed the previous record short position of 28,000 lots recorded during the depth of the global financial crisis in February 2009," Macquarie said in a research note.
Tin was $20,100 per tonne in rings from $20,225 at Tuesday's close, while zinc, untraded in rings, was bid at $1876.50 from $1,892. Lead was $2,070 from $2,079.5, aluminium was $1,817 from $1,832. Nickel was $13,865 from $14,040.