* China manufacturing activity unexpectedly expands in August
* Dollar tumbles on weak U.S. factory data
* LME on-warrant tin stocks slide to 11-year low
* Asian aluminium premiums to fall - consultancy (Updates with closing prices)
By Eric Onstad
LONDON, Sept 1 (Reuters) - The price of zinc surged to its highest in more than 15 months on Thursday, with other metals also rallying, after upbeat factory data from top metals consumer China and a weak dollar spurred buying.
Tin prices jumped to a 19-month peak as inventories slid and lead climbed to its strongest in more than 14 months, though aluminium dropped to a one-month low on oversupply concerns.
Activity in China’s manufacturing sector unexpectedly expanded at its fastest pace in nearly two years in August as construction boomed, suggesting the economy is steadying in response to stronger government spending.
“It buoyed sentiment, it showed the metals-intensive manufacturing sector has rebounded,” said Robin Bhar, head of metals research at Societe Generale in London.
“The big question is whether that rebound will be sustained over coming months. It’s doubtful because China’s infrastructure and fiscal stimulus of the first half is beginning to fade.”
Benchmark zinc on the London Metal Exchange surged 1.2 percent to close at $2,338 a tonne, its highest since May 2015.
“No technical sign yet of the uptrend weakening, so days ahead are still bright for zinc, it seems,” broker Triland said in a note.
Sister metal lead climbed 1.3 percent to end at $1,930, its most expensive since June 2015, while tin gained 1.3 percent to $19,125, its highest since February 2015.
Tin has been the LME’s second-strongest performer behind zinc this year with gains of 31 percent, partly attributable to a steep erosion of inventories.
On-warrant tin supplies in LME warehouses - those not earmarked for delivery and therefore available to investors - dropped on Thursday by 150 tonnes to 2,750 tonnes, the lowest since June 2005.
Also supporting metals was a slide in the dollar after U.S. manufacturing activity unexpectedly declined in August, casting new doubts on the strength of the U.S. economy.
LME copper edged up 0.3 percent to finish at $4,630 after falling on Tuesday to the weakest since June 24 at $4,600 amid mounting supply.
LME exchange stocks rose again on Thursday by 11,250 tonnes to 304,775, up 50 percent over the past three weeks. MCUSTX-TOTAL
Aluminium hit a one-month low of $1,598.50 before edging into positive territory in late trading and closing up 0.1 percent at $1,615.
Asian surcharges for physical aluminium are due to come under pressure in coming months due to increased exports from both China and India, said Paul Adkins of consultancy AZ China.
“India cannot possibly use all the metal it is making. In relative terms, India has a bigger over-capacity problem than China,” he told the Reuters Global Base Metals Forum.
Nickel ended up 1.5 percent at $9,910.
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 (Additional reporting by Melanie Burton in Melbourne; Editing by David Goodman and Mark Potter)