METALS-Copper falls to two-week low, nickel ticks higher

* Copper cash-to-three backwardation eases to $50/T

* Shanghai copper premiums slip to $105-125/T

* China traders jittery over financing after Qingdao probe

* Nickel bucks weaker trend, seen extending gains in H2

(Adds details, quotes; updates prices)

LONDON, June 4 (Reuters) - Copper prices fell to a three-week low on Wednesday, under pressure from signs of a surplus and doubts about the outlook for demand from China, with traders concerned about disruption to import shipments related to a probe of financing deals.

Benchmark copper on the London Metal Exchange (LME) slid to a session low of $6,760 a tonne, its lowest level since May 12. It fell 1.4 percent to $6,772.75 by 1427 GMT.

The premium for cash copper over three-month prices <CMCU0-3> has fallen from last week's two-year high of $101 a tonne to $50 on Wednesday, indicating that market tightness has been easing.

"The market expected that any available metal would disappear into China's state reserve. But in the last week following state purchases, there has been a drop in premiums for delivery into China," Nic Brown, head of commodities research at Natixis said.

"That tells me that the market is not as tight as it was."

A Reuters poll in April showed analysts expected the copper market to be in a 228,000 tonne surplus this year, with that number rising to 262,000 tonnes in 2015.

China's economy has had a bumpy ride this year as a run of data has showed a cooling in investment, retail sales and factory output, feeding concerns that growth could fall further from an 18-month low seen between January and March.

"The overall economy is mixed, not on a firmer footing ... and at the same time summer is around the corner when fabrication rates at (copper) cable plants will start to slow," said Helen Lau, a mining analyst at UOB-Kay Hian Securities in Hong Kong. "We are not surprised to see this consolidation."

Also creating uncertainty was an investigation by authorities at China's northeastern port of Qingdao.

Copper premiums in Shanghai fell on Wednesday after traders cited concerns over disruptions to some shipments at China's third-largest port of Qingdao, related to a probe into the use of the metal as collateral in financing.

Also weighing on copper was the prospect of more supply after foreign copper miners in Indonesia agreed in principle to pay a controversial export tax, according to the country's deputy finance minister said. This followed a series of talks aimed at restarting concentrate exports after a near-five-month halt.


Nickel bucked the weaker trend, rising 0.4 percent to $19,159 a tonne.

Nickel has surged 38 percent this year on an export ban on unprocessed ore exports from Indonesia, but is down 11 percent from a peak of $21,625 hit on May 13.

While the nickel price has been taking a breather in recent weeks after the earlier sharp gains, many investors and analysts expect more gains in the second half.

"So far the impact of the ban has been muted by the fact that there are such large inventories around the world, but the market is starting to prepare for what happens in 2015 and beyond," Jim Lennon, a consultant with Macquarie, told a briefing.

"Through the second half of this year you are going to start to see a really substantial fall-off in the level of nickel production in China."

Macquarie forecasts nickel will rise to $23,500 a tonne in the fourth quarter and $26,000 next year.

Aluminum fell to its lowest level in a week at $1,815 a tonne in intraday trade, before paring losses to trade down 1 percent at $1,827.50.

The discount for cash aluminum versus three-month prices fell to an 18-month low of $22 a tonne on Tuesday before rising to a $24.25 discount on Wednesday. This compares to a discount of $45.50 in early May.

"This (narrowing contango) is a bearish factor for premiums as it reduces the attractiveness of financing deals," Harbor Aluminum Intelligence Unit said in a note.


Three month LME copper

Most active ShFE copper

Three month LME aluminum

Most active ShFE aluminum

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin

(Additional reporting by Melanie Burton in Sydney; editing by Jane Baird and David Evans)