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METALS-Copper heads for weekly loss, retreating from record high

(Updates with official prices)

LONDON, May 14 (Reuters) - Copper prices were on course for their first weekly decline since the start of April on Friday as rising inflation fears and a dip in demand from China dragged prices down.

Benchmark copper on the London Metal Exchange (LME) was 1% lower at $10,239.50 a tonne in official trading, having scaled a record high of $10,747.50 on Monday.

It was down about 1.7% over the week.

Many analysts expect the metal used in construction and power to rise further as the global economy rebounds and moves from fossil fuels to copper-intensive electrification.

“Supply is relatively tight while demand keeps expanding,” said WisdomTree analyst Nitesh Shah. “I think it will start going up again.”

Chinese demand for copper is likely to remain strong as local governments plough money into infrastructure, he added.

MARKETS: Fears that central banks will act to contain rising inflation hit stock markets and commodities this week while boosting the dollar and bond yields.

By Friday, however, stocks were moving higher and the dollar and yields lower after U.S. Federal Reserve officials said there would be no imminent tightening of monetary policy.

CHINA: New bank loans in China fell more than expected in April and money supply growth slowed to a 21-month low, pointing to weaker growth in the world’s biggest metals consumer.

The government has also said it will monitor and effectively cope with a rapid increase in commodity prices, without specifying how, while warnings of a crackdown on misbehaviour in the steel market have hammered Chinese steel prices.

PREMIUMS: Chinese Yangshan import premiums slipped to $38 a tonne, the lowest on record. “The high copper price appears to have curbed demand,” said broker Marex Spectron.

SPREAD: On the LME, cash copper fell to a $30 discount versus the three-month contract, the biggest in a year, suggesting that ample metal is available. CMCU0-3

OTHER METALS: LME aluminium was up 0.5% at $2,462.50 a tonne, zinc rose 0.7% to $2,940.50, nickel gained 0.6% to $17,433, lead was up 0.7% at $2,162.50 and tin was 0.3% higher at $29,280.

All except nickel reached multi-year highs this week. All are on track for weekly declines. (Reporting by Peter Hobson; Additional reporting by Mai Nguyen; Editing by David Goodman and Jan Harvey)

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