London copper edges up as U.S. tapering pressure eases

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Copper prices in London edged up on Wednesday as investors cheered slowing consumer price increases in the United States, easing pressure for an early policy tapering.

Three-month copper on the London Metal Exchange rose 0.1% to $9,446.50 a tonne by 0155 GMT, while the most-traded October copper contract on the Shanghai Futures Exchange eased 0.9% to 69,720 yuan ($10,824.07) a tonne.

Underlying U.S. consumer prices increased at their slowest pace in six months in August, suggesting that inflation had probably peaked though it could remain high for a while.

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Copper is often used as a gauge of global economic health and any U.S. stimulus cutback could slow recovery.

Keeping a lid on metals prices was a COVID-19 outbreak in China’s Fujian province, which reported its fifth straight day of new local infections, though cases remained contained in three cities on the coast.

China is the world’s biggest metals consumer.

FUNDAMENTALS

* Accelerating production cuts in top producer China will create large shortages of aluminum this year, while worries about supply chain disruptions in Guinea have helped propel prices to 13-year highs.

* China’s industrial output grew 5.3% in August from the same period a year ago, narrowing from a 6.4% increase in July, while retail sales growth slowed significantly, official data showed.

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* The discount of LME cash aluminum on the three-month contract expanded to $21.25 a tonne, its biggest since July 6, indicating easing tightness in nearby supply.

* LME aluminum rose 0.5% to $2,844 a tonne, nickel increased 0.3% to $19,690 a tonne, lead fell 0.9% to $2,252 a tonne while ShFE aluminum shed 2.1% to 22,305 yuan a tonne.

* ShFE nickel dipped 0.1% to 146,980 yuan a tonne, lead was down 1.8% at 14,680 yuan a tonne, while tin rose 0.3% to 254,780 yuan a tonne.

* For the top stories in metals and other news, click or ($1 = 6.4412 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Shounak Dasgupta)