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METALS-Copper prices hit 7-week low as traders brace for China curbs

(Updates prices, adds quotes)

HANOI, June 15 (Reuters) - Copper prices fell on Tuesday to their lowest in more than seven weeks, as traders feared measures that the authorities in China, the biggest consumer of the red metal, would take to curb a recent price rally in commodities.

Three-month copper on the London Metal Exchange fell as much as 2.9% to $9,680 a tonne, before paring some losses to trade down 2.4% at $9,737 a tonne as of 0715 GMT.

The most-traded July copper contract on the Shanghai Futures Exchange fell 1.3% to 70,230 yuan ($10,969.84) a tonne, having hit a near two-month low of 69,500 yuan a tonne earlier.

China’s state planner last week renewed its pledge to step up monitoring of commodity prices, as domestic producer inflation hit its highest in more than 12 years.

Both the copper contracts hit record highs in May.

Markets expected China to release state reserves of copper, aluminium and zinc, as well as possibly trim long positions and crackdown price speculative activities.

“Markets have taken this rumour, so prices collapsed,” said a copper producer.

High copper prices have kept some buyers at bay.

Yangshan copper premium SMM-CUYP-CN was last at $22 a tonne, hovering around its lowest since February 2016 and down 80% since May last year, indicating weak demand for imported metal into China.

“The government knows that low material price and high manufactured good price are favorable to the Chinese economy,” said a China-based metals trader.

“Unless (LME) price retreats to $8,000-$8,500,the low (copper) consumption will persist,” the trader added.

FUNDAMENTALS

* One party controls 50-80% of available lead stocks and short-term futures, LME data showed. <0#LME-WHT>

* A union representing striking workers from Vale SA’s Sudbury, Canada, nickel mine recommended that its members reject the Brazilian company’s latest offer.

* LME aluminium fell 1% to $2,469 a tonne, nickel declined 2.6% to $18,005 a tonne and tin shed 1.9% at $31,060 a tonne.

* ShFE aluminium rose 0.6% to 18,945 yuan a tonne, nickel lost 0.8% to 132,500 yuan a tonne and tin dropped 1.9% to 205,930 yuan a tonne.

$1 = 6.4021 yuan Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips, Aditya Soni

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