(Reuters) - Copper prices fell back from a near one-month high in European trading on Monday, with thin volumes sharpening moves, as investors swerved from supply fundamentals to focus on a stronger dollar.

Losses were limited, however, as falling stockpiles pointed to improved demand outside China, with the top consumer poised to re-export some metal to boost availability in the global market.

London Metal Exchange three-month copper was last quoted at $8,370 a metric ton (1.1023 tons) by 0952 GMT, down 0.5 percent on the day after rising to $8,496.75, its highest since April 4.

The dollar rose 0.2 percent against a basket of currencies .DXY, with signs of increasing euro zone economic gloom and hostility toward austerity keeping the single currency down and making dollar-priced commodities less attractive.

Copper stockpiles in London Metal Exchange warehouses stood at 248,350 metric tons on Monday, the lowest level since November 2008, with cancelled warrants, or those tagged for delivery, at nearly 40 percent of total inventories.

Large Chinese copper smelters and trading firms have agreed to ship refined copper cathodes to the LME over the next two months, although traders say the volume is unlikely to be significant.

While spot demand appeared improved, some analysts were wary over whether the market could sustain gains until Chinese demand kicks in, also pointing to the possibility that metal earmarked for delivery might well just be moving to another storage facility.

We are seeing pretty decent backwardation in the market for spot demand outside China, and cancelled warrants remain very high. But I would be careful because China is still the driver here, VTB Capital Andrey Kryuchenkov said.

Reflecting tightness in immediate supplies, the premium of LME cash copper over three-month material shot up to $149 a metric ton on Friday, the biggest since early August 2008, only easing slightly to $145 on Monday.

Global demand for refined copper is expected to exceed production by 240,000 metric tons in 2012, but the market is projected to move into a production surplus the following year, the International Copper Study Group (ICSG) said.

NO LARGE SHIPMENTS

Dealers said that the amount of copper China would re-export would be irrelevant against its huge import volumes.

Last year, China exported 156,292 metric tons of refined copper, according to customs data, just a fraction of its imports that totaled more than 2.8 million metric tons.

The bulk of the copper that left the LME this year was believed to have been shipped to China, where stockpiles surged to their highest in nearly a decade in March.

Data from the Shanghai Futures Exchange on Friday showed inventories at its warehouses fell to the lowest since early February, at 204,762 tons.

The drop in copper stocks at Shanghai warehouses along with product inventories at Chinese fabricators suggest demand from China is on the rebound, investment bank Macquarie said.

We believe the copper stock build in China has come to an end, and refined copper inventory will decline over the next quarter as a result of improving demand from China, Macquarie Commodities Research said in a note.

Other analysts have suggested, however, that Chinese demand will not pick up in a sustained way until the second half of this year at the earliest.

In other metals, aluminum fell 0.1 percent to $2,105.50 a metric ton and nickel shed 0.6 percent to $17,990.

(Reporting by Veronica Brown and Manolo Serapio Jr in Singapore, editing by Jane Baird)