(Updates prices to Shanghai close)

By Nick Trevethan

SINGAPORE, May 28 (Reuters) - Shanghai copper edged higher
on Wednesday as London futures ticked down, but further gains
were unlikely with Chinese buyers unwilling to commit while
international prices hold above $8,100 a tonne.

Shanghai August copper SCFQ8 rose 240 yuan or 0.4 percent
to 62,470 yuan ($8,991) a tonne at the close. London Metal
Exchange copper for delivery in three months MCU3 ticked down
$10 or 0.1 percent to $8,180 at 0703 GMT.

"Shanghai futures are likely to hold between 61,500 and
64,000 yuan over the next month. But LME prices could drop a
little, but should find support at $8,100," a dealer in
Shanghai said.

"Domestic demand is below normal which is a cause for some
concern, but supplies are tightening a little and the spot
market is maintaining a premium of 100-200 yuan." He added that
few Chinese consumers would consider buying LME metal until
prices dipped closer to $8,000.

The gap in prices between the London and Shanghai copper
markets narrowed to 3,871 yuan from 4,335 yuan on Tuesday,
including Chinese value-added tax. The spread hit a record
6,549 yuan on April 18.

Shanghai aluminium SAFQ8 rose 10 yuan to 19,105, while
LME aluminium fell $3 to $2,993, holding near $3,000.

Oversupply has capped Chinese prices, which have gained a
modest 5 percent this year.

But London prices are up around 25 percent, making
aluminium the second strongest performer among LME metals, as
the market bets that high energy prices and power supply
problems will soon make a dent in the LME's 1 million tonne
stockpile of the metal.

LME nickel MNI3 fell $500 or 2.2 percent to $22,800,
following a 3.3 percent slide on Tuesday.

"There is a real problem with nickel. You have people
trying to use less of it in stainless steel and in addition
stainless mills are using more nickel-containing pig iron and
buying less metal on the exchange," a trader in Singapore said.

Nickel stocks fell 132 tonnes to 48,558 overnight, but not
enough to turn around sentiment.

"(The) price is currently seeking a floor to recent losses
and will likely bottom out at the $22,000 area before
reasserting a more positive outlook," brokerage Triland Metals
said in a daily note.
Metals prices at 0703 GMT:
Metal Last Change Pct Move End 2007 Pct chg
08
LME Cu 8180.00 -10.00 -0.12 6670.00
22.64
SHFE Cu* 62470.00 240.00 +0.39 56880.00
9.83
LME Alum 2993.00 -3.00 -0.10 2403.00
24.55
SHFE Alum* 19105.00 10.00 +0.05 18180.00
5.09
COMEX Cu** 372.50 -1.60 -0.43 304.10
22.49
LME Zinc 2145.00 -6.00 -0.28 2370.00
-9.49
SHFE Zinc 17660.00 -20.00 -0.11 18950.00
-6.81
LME Nickel 22800.00 -500.00 -2.15 26350.00
-13.47
LME Lead 2035.00 -15.00 -0.73 2550.00
-20.20
LME Tin 24000.00 -200.00 -0.83 16400.00
46.34
LME/Shanghai arb^ 3871
** 1st contract month for COMEX copper
* 3rd contact month for SHFE aluminium, copper and zinc
^ LME 3-m copper in yuan, including 17 pct VAT, minus SHFE
third month
($1=6.948 Yuan)
(Editing by Clarence Fernandez)