* China port stops metal shipment due to probe - sources

* China May PMI climbs to 50.8 in May from 50.4 in April

* U.S. factory activity expands further in May

(Updates prices, adds comment, news of China port halting shipments)

By Maytaal Angel and Harpreet Bhal

LONDON June 2 (Reuters) - Copper rose on Monday, after its biggest monthly gain this year in May, helped by dwindling stocks, seasonal buying interest in top consumer China and positive Chinese factory data.

China's manufacturing activity expanded at the fastest pace in five months in May, reinforcing views that the world's second-largest economy is regaining momentum after a wobble at the start of the year. ID:nL3N0OI055

That momentum coupled with seasonal buying in China and strong speculative appetite for copper has helped send London Metal Exchange stocks of the metal near their lowest in six years at 170,825 tonnes. MCU-STOCKS

Three-month copper on the London Metal Exchange CMCU3 rose 1 percent to $6,914.50 a tonne at 1355 GMT. The metal climbed 3 percent in May, the biggest monthly advance since December.

"Copper might have a bit further to go (near term). China is sweeping up every spare tonne of copper that's produced in the world (and) seasonal factors are always supportive when the surplus is not that large," said BNP Paribas strategist Stephen Briggs.

But he added: "We won't stay above $7,000 a tonne for that long. The underlying surplus will have more of an impact on market sentiment later in the year (and) China can't go on absorbing this spare copper forever."

In industry news, China's northeastern port of Qingdao has halted shipments of aluminium and copper due to an investigation by authorities, causing concern among bankers and trade houses financing the metals, trading and warehousing sources said.

ID:nL6N0OJ1VC

Metal imports have been partly driven in China as a means to raise finance, where traders can pledge metal as collateral to obtain better terms. In some cases the same shipment can be pledged to more than one bank, fuelling hot money inflows and spurring a clampdown by Chinese authorities.

NET LONGS

Hedge funds and money managers have raised their net long or buy positions in copper to the highest since January, in the week to May 27, according to data from the Commodity Futures Trading Commission. ID:nEMS4ZS1EU

Also helping support gains, the U.S. manufacturing sector expanded in May at a faster clip than previously seen, an industry report showed. ID:nN9N0O500K

"Concerns about weakening demand were allayed by stronger U.S. economic data, after a weather-related slowdown in the first quarter, and signs that China's economy was stabilising in the second quarter," Capital Economics said in a note.

But raising some concerns, China's home prices fell slightly in May from the previous month, two private surveys showed on Sunday, adding to fresh signs of cooling in a property market that has become a persistent drag on the broader economy in recent months. ID:nL3N0O72IU

China's HSBC PMI for May is due on Wednesday, alongside other global indicators on manufacturing health, including in the United States, where a jobs report is also due on Friday.

Limiting gains in copper, South Korea's LS-Nikko Copper plans to restart its No.2 plant this week, a company spokesman said on Monday, after the smelter was closed for almost a month following an explosion that injured eight workers.

ID:nL9N0O201U

Soothing worries about supplies of nickel, New Caledonia authorities said on Monday they had authorised a conditional restart of Brazil-based Vale's VALE5.SA nickel mine operations, which were suspended more than three weeks ago after acid-tainted effluent spilled into a river. ID:nL3N0OI0UH

Nickel prices CMNI3 were up 1.3 percent at $19,500 a tonne.

PRICES

Three month LME copper CMCU3

Most active ShFE copper SCFcv1

Three month LME aluminium CMAL3

Most active ShFE aluminium SAFcv1

Three month LME zinc CMZN3

Most active ShFE zinc SZNcv1

Three month LME lead CMPB3

Most active ShFE lead SPBcv1

Three month LME nickel CMNI3

Three month LME tin CMSN3

(Additional reporting by Melanie Burton in Sydney, editing by William Hardy and Susan Thomas)

((maytaal.angel@thomsonreuters.com)(00442075429105)(Reuters Messaging: maytaal.angel.thomsonreuters.com@reuters.net)) 

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