METALS-Copper extends gains on tighter supply signs, softer dollar

By Lucas Liew

Sept 1 (Reuters) - Copper prices rose further on Monday, buoyed by signs of tightening supply and a softer U.S. dollar.

Three-month copper on the London Metal Exchange CMCU3 rose 0.24% to $9,926 per metric ton by 0229 GMT, heading for a third straight session of gains.

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 gained 0.66% to 79,740 yuan ($11,147.93) a ton, rising for a second straight session.

Copper prices extended gains as imports arbitrage has turned profitable, with a recovery in spot premium suggesting tighter supply, analysts from ANZ said in a note.

"Prospects of slowing refined copper production also supported market sentiment," they said.

Copper production in top producer Chile edged up 0.3% year-on-year in July, while manufacturing production rose 2.7%, sharply slower than the 12% increase recorded in the previous month.

The dollar index =USD, which measures the currency against six major peers, eased 0.04% to 97.79, having clocked a monthly decline of more than 2% on Friday.

A softer dollar makes greenback-denominated assets more affordable to holders of other currencies. FRX/

China's manufacturing sector contracted for the fifth consecutive month in August, as exports declined due to factors such as U.S. tariffs, a property sector downturn, and weak job security.

Profits at China's industrial firms fell for the third straight month in July, underscoring the challenges businesses face amid sluggish demand and ongoing factory-gate deflation.

Among other London metals, aluminium CMAL3 dipped 0.15% to $2,611.5 a ton, and tin CMSN3 lost 0.74% to $34,760, while nickel CMNI3 gained 0.42% to $15,485, lead CMPB3 strengthened 0.13% to $1,993.5, and zinc CMZN3 rose 0.16% to $2,823.5.

SHFE aluminium SAFcv1 dipped 0.51% to 20,625 yuan, lead SPBcv1 eased 0.06% to 16,840 yuan, and tin SSNcv1 lost 1.16% to 272,620 yuan, while nickel SNIcv1 climbed 1.67% to 123,320 yuan, and zinc SZNcv1 gained 0.36% to 22,175 yuan.