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Oil and Gas

METALS-Copper hit by Brexit vote, buoyant dollar; pares losses

* Zinc, tin drop to three-week lows before paring losses

* Moves in base metals less sharp than other markets

* Dollar index up by more than 2 pct to three-week high (Updates with closing prices)

LONDON, June 24 (Reuters) - The price of copper and other industrial metals fell on Friday as worries about economic growth rose following the British vote to leave the European Union, and as the dollar soared.

But despite broad-based declines, which saw zinc and tin fall to three-week lows, the moves were not as strong as in other commodities and the market recouped much of its losses by the close.

Analysts said this was partly due to the key role of China, the world’s biggest metals consumer.

“Of course, there are implications for EU growth, which would be negative for metals, and a strong dollar is another negative,” said Caroline Bain, senior commodities economist at Capital Economics in London.

“But I suppose since because China is primarily the main demand force for industrial metals, there’s the feeling it’s not going to have a massive impact on the (supply-demand) fundamentals,” Bain said.

Highlighting the impact that stimulus has had on the Chinese economy, a survey on Friday showed business confidence among entrepreneurs in China has picked up for the first time in more than two years in the second quarter of 2016.

Three-month copper on the London Metal Exchange slid as much as 4 percent before trimming losses to close down 1.7 percent at $4,698 a tonne.

The UK vote to leave the EU forced the resignation of Prime Minister David Cameron while world stock markets saw $2 trillion in value wiped out.

Copper at one point saw its biggest daily slide since July last year, after hitting its highest since May 6 on Thursday at $4,795.

Traders said the relatively subdued reaction of base metals may also be due to the fact investors have already withdrawn a lot of capital from the downtrodden sector, where prices are stuck around the cost of production after years of oversupply.

“Once the markets have calmed down, market participants will no doubt quickly return to focusing on the fundamental data again - which we believe point to higher prices for most metals over the course of the year,” Commerzbank analysts said in a note.

The drop in copper erased some of a weekly advance that had been sparked by a fall in the dollar as expectations grew that the U.S. would delay its next interest rate increase after its economy stumbled in the first quarter.

In the wake of the Brexit vote, the dollar index surged about 2 percent to the highest level in more than three months, making commodities priced in the greenback more expensive for buyers using other currencies.

LME nickel was the biggest loser, falling 2.2 percent to end at $9,020, while aluminium slipped 1 percent to finish at $1,617.50.

Lead, untraded in closing rings, was bid down 1.2 percent to $1,710, while zinc gave up 1 percent to trade at $2,018 at the close and tin lost 0.6 percent to $17,150, the latter two metals paring losses after touching their lowest levels since June 3.

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 (Additional reporting by Melanie Burton in Melbourne; editing by Mark Heinrich)

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