* Copper eases as dollar turns up, but near all-time high

* Strike in Peru supportive, raises supply concerns

* Cash copper premium to three-month price at two-year high

(Updates closing prices)

By Humeyra Pamuk and Raissa Kasolowsky

LONDON, June 30 (Reuters) - Copper closed lower on Monday as
the dollar turned higher against the euro, offsetting supply
concerns raised by a nationwide strike in major producer Peru.

Copper for three-months delivery on the London Metal
Exchange MCU3 touched $8,620 per tonne, its highest level
since April 29 before closing at $8,520 per tonne, compared with
$8,530/8,535 last quoted on Friday.

At the New York Mercantile Exchange's COMEX division, copper
for September delivery HGU8 was trading down 0.27 cent at
$3.8515 a pound.

"The strike in Peru is probably starting to be discounted as
people look to a possible settlement down the road," said Edward
Meir, a metals analyst at MF Global investment bank.

The largest federation of mining unions in Peru, the world's
second largest copper miner, said on Monday a strike had started
and operations at Peru's biggest copper pit, Antamina, owned by
BHP Billiton (BLT.L: Quote, Profile, Research) and Xstrata (XTA.L: Quote, Profile, Research) were stopped.
[ID:nN30282516] [ID:nN30364900]

The dollar rebounded against the euro as traders bought back
the U.S. currency as the second quarter ends.[ID:nN30399260]

Meir said the move in the dollar was probably why copper
came off its intraday high.

"I think a lot of these metals are very overdone so we
wouldn't be surprised to see a bit of a pull-back," he added.

A mine strike at Codelco, the world's top copper producer,
pushed copper to a record high of $8,880 per tonne in mid-April.

Falling stocks underpinned prices with LME warehouse
inventories showing a drawdown of 300 tonnes to 122,600, just
sufficient for 2.5 days of global consumption.

As an indication of market tightness, copper's backwardation
-- the premium for cash material MCU0 over the three-months
price -- shot up to $180 per tonne, the highest since May 2006.

UNDERPINNING COPPER

In addition to supply issues, investment money was flowing
into the market as prospects for the dollar remained weak and
commodities were on the rise as an asset class, dealers said.

Earlier in the session oil CLc1 rose more than $3 a barrel
to a new record high above $143, propelled by heightened
tensions between Israel and Iran over Tehran's nuclear
programme. [ID:nSYD57653]

"With energy prices at these levels, costs are even higher
for producers. That means prices (of metals) will go higher,
too," a trader on the floor at the LME said.

Several traders also said copper was far too expensive,
given the fact that demand from China remained weak and did not
show many signs of recovery soon.

"Copper has no business being at $8,500 per tonne, but a
weak dollar, strong crude oil and the other external factors
could see the metal trade higher in the near term, justified or
not," analyst John Reade at UBS said in a research note.

Aluminium MAL3 closed down $5.5 at $3,114.5 per tonne,
while nickel MNI3 was steady at $21,950 and lead MPB3 was
$10 lower at $1,790.

Zinc MZN3 was unchanged at $1,930, while tin MSN3 closed
up at $23,450 versus a last quote of $23,350/23,400 on Friday.

Metal Prices at 1617 GMT
Metal Last Change Pct Move End 2007 Ytd Pct

move
LME Cu 8500.00 -30.00 -0.35 6670.00 27.44
SHFE Cu* 63430.00 1070.00 +1.72 56880.00 11.52
LME Alum 3110.00 -10.00 -0.32 2403.00 29.42
SHFE Alu* 19145.00 50.00 +0.26 18180.00 5.31
COMEX Cu** 386.20 -2.20 -0.57 303.50 27.25
LME Zinc 1920.00 -10.00 -0.52 2370.00 -18.99
SHFE Zinc* 16255.00 175.00 +1.09 18950.00 -14.22
LME Nick 21775.00 -175.00 -0.80 26350.00 -17.36
LME Lead 1770.00 -30.00 -1.67 2550.00 -30.59
LME Tin 23225.00 -125.00 -0.54 16400.00 41.62
** 1st contract month for COMEX copper
* 3rd contact month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Additional reporting by Nicholas Trevethan in Singapore;
editing by Peter Blackburn)