* Copper smelter shutdown and China output underpin prices
* Dollar falls against growth-linked currencies after Beijing reforms
* Jiangxi Copper and Freeport agree on higher treatment charges
By Susan Thomas
LONDON, Nov 18 Copper dipped near three-month lows on Monday as expectations of a growing surplus of the metal and a lack of immediate measures to boost commodities demand in China's reform package offset a softer dollar.
Three-month copper on the London Metal Exchange was down at $6,988.75 a tonne from $7,010 at Friday's close. It fell to a three-month low of $6,940 on Thursday and was the week's worst performer in the base metals complex.
Beijing unwrapped its boldest set of economic and social reforms in nearly three decades on Friday, relaxing its one-child policy and freeing up markets further to put the world's No. 2 economy on a more stable footing. The reforms may take years, however.
"We knew that the reforms would be positive, but I tend to think the markets wanted more concrete ideas. They didn't get them, therefore markets sold off," said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin.
The dollar and yen fell on Monday against growth-linked currencies that drew support from higher stock markets as investors cheered prospects of more economic reform in China.
A weaker U.S. currency makes it less expensive for foreign investors to buy dollar-priced commodities, thus supporting prices.
But for copper, expectations of rising mine supply weighed on prices, with the metal unable to draw support also from expectations of continued economic stimulus from the U.S. Federal Reserve.
The supply situation was hammered home with China's Jiangxi Copper and Freeport McMoRan agreeing to treatment and refining charges (TC/RCs) of $92 a tonne and 9.2 cents per pound for copper concentrate shipments in 2014, up 31 percent from this year.
Miners pay TC/RCs to smelters to convert concentrate into refined metal, with charges deducted from the sale price. The charges typically rise when supply increases.
Analysts polled by Reuters expect the copper market to post a surplus of 182,000 tonnes this year, up from a previous forecast of 153,000 tonnes, before ballooning to 328,000 tonnes in 2014.
Hedge funds and money managers turned copper into a net short for the week ended Nov. 12, a report by the Commodity Futures Trading Commission showed.
Adding some support to copper prices was a shutdown of Glencore Xstrata's PASAR copper smelter and refinery in the Philippines, after it sustained structural damage during Typhoon Haiyan, and questions over China's production, Standard Bank said in a note.
China's refined copper output may have been inflated by more than 15 percent this year, smelter sources said.
"Rather than the start of a capitulation, we believe that prices are at worst settling into a new sideways trading range, with the risk in our view still lying to the upside as we head towards year-end," Standard Bank added.
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
Three month LME tin