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METALS-LME copper takes a breather from 5-wk high; dollar weighs

Mai Nguyen

(Adds quotes, updates prices)

SINGAPORE, June 26 (Reuters) - London copper fell from a five-week high on Wednesday as long investors took profits from recent gains, while prices were also pressured by a stronger dollar after comments from the U.S. Federal Reserve chairman diminished dovish enthusiasm.

Three-month copper on the London Metal Exchange (LME) fell 0.5% to $6,012 a tonne by 0422 GMT, after hitting its highest since May 21 in the previous session.

The dollar edged up after Fed Chairman Jerome Powell asserted its independence and pushed back against U.S. President Donald Trump's call for a steep cut.

Meanwhile in China, the Shanghai Interbank Offered Rate for the overnight tenor fell to its lowest since June 2009 of 0.9910% on Wednesday, as liquidity in the banking system remained ample.

A stronger dollar makes greenback-priced metals on the LME more expensive for holders of other currencies, while a lower interest rate in China makes borrowing costs cheaper for investors who want to buy metals contracts in Shanghai.

The most-traded copper contract on the Shanghai Futures Exchange (ShFE) rose 0.8% to 47,290 yuan ($6,863.97) a tonne.

FUNDAMENTALS

* ZINC: Zinc prices on ShFE jumped as much as 2% to a one-week high of 20,180 yuan a tonne.

* ZINC SMELTERS: "Some major smelters were underutilised in the past months (due to) environmental restrictions and Zhuzhou relocating its smelters. Current inventory (in China) is still low," said analyst Dina Yu of metals consultant firm CRU.

* Yu expected weaker refined zinc output in July due to maintenance at some smelters, but said output is likely to rise during August and December due to higher utilisation rates.

* TRADE TALKS: The United States hopes to re-launch trade talks with China after their presidents meet on Saturday, but Washington will not accept any conditions around the U.S. use of tariffs in the dispute, a senior U.S. official said.

* CHINA: China's retail sales is seen growing at a slower-than-expected pace and would now overtake the United States only in 2021 rather than this year, as the Sino-U.S. trade war takes a toll on demand, said market researcher eMarketer.

* RARE EARTH: China's exports of rare earth magnets to the United States rose more than 20% in May from the previous month to their highest since at least 2016, official data showed on Tuesday, as Beijing considers restricting shipments.

* PRICES: Benchmark aluminium fell 0.2%, nickel eased 0.4%, zinc decreased 0.4% and lead was 0.5% lower. In Shanghai, most metals rose, with nickel gaining 1% and aluminium rising 0.2%.

* BYD IN CANADA: Chinese electric vehicle maker BYD Co Ltd said on Tuesday it had opened its first plant in Canada, which will initially focus on assembling buses for the Toronto Transit Commission, a public transport agency.

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PRICES

Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 6.8896 Chinese yuan)

(Reporting by Mai Nguyen; Editing by Subhranshu Sahu & Uttaresh.V)