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METALS-Shanghai copper hits 8-week low on demand woes ahead of China holiday

HANOI, Feb 3 (Reuters) - Copper prices in Shanghai hit their lowest in eight weeks on Wednesday, while prices also fell in London, dragged down by demand concerns ahead of a major holiday in top consumer China.

The most-traded March copper contract on the Shanghai Futures Exchange dropped as much as 1.2% to 56,920 yuan ($8,813.60) a tonne, its lowest since Dec. 9, while three-month copper on the London Metal Exchange dipped 0.4% to $7,743 a tonne by 0320 GMT.

China will celebrate its Lunar New Year holiday during Feb. 11-17, when metals demand usually dip as business activities slow.

Meanwhile, a recent coronavirus outbreak in China has dampened the country’s economic activities in January, dragging factory output and service activities growth to multi-month lows.

LME nickel dropped 0.4% to $17,625 a tonne, lead declined 0.4% to $2,008.50 a tonne while ShFE nickel dropped 1.7% to 129,700 yuan a tonne and ShFE tin shed 2.4% to 164,440 yuan a tonne.

FUNDAMENTALS

* Yangshan copper premium SMM-CUYP-CN rose to its highest since August 2020 at $73 a tonne, amid disrupted supplies from top producer Chile.

* LME cash copper was last at a $10-a-tonne premium over the three-month contract CMCU0-3, a level unseen since September 2020, indicating tight supplies of nearby contracts.

* LME lead inventories fell to their lowest since July 2020 at 94,625 tonnes.

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MARKETS NEWS

* Asian markets moved higher during early trading as governments around the world looked poised to boost spending to help economies recover from the coronavirus and vaccine roll-out programs accelerated.

DATA/EVENTS (GMT)

0700 UK Reserve Assets Total Jan

0850 France Markit Serv, Comp PMI Jan

0855 Germany Markit Serv, Comp Final PMI Jan

0900 EU Markit Serv, Comp Final PMI Jan

1000 EU HICP Flash YY Jan

1000 EU HICP-X F&E Flash YY Jan

1300 Brazil Markit Serv, Comp PMI Jan

1445 US Markit Serv, Comp Final PMI Jan

1500 US ISM N-Mfg PMI Jan

$1 = 6.4582 yuan Reporting by Mai Nguyen; Editing by Rashmi Aich

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