METALS-London copper dips on potentially sluggish peak season, Fed rate-cut hopes cap losses

By Lucas Liew

Sept 11 (Reuters) - Copper prices on the LME slipped in early Asian trade, weighed by potentially lackluster demand, though expectations of a U.S. interest rate cuts capped losses.

Three-month copper on the London Metal Exchange CMCU3 dipped 0.25% to $9,988 per metric ton by 0223 GMT, while the most-traded copper contract on the Shanghai Futures Exchange SCFcv1 gained 0.49% to 80,070 yuan ($11,241.68) a ton.

Despite the peak season for consumption approaching, the terminal margin has weakened, which may indicate a sluggish peak season, said broker Galaxy Futures.

Tamer-than-expected U.S. producer price inflation data strengthened expectations for interest rate cuts, while eyes remain on Thursday's consumer price inflation data for more cues on the Federal Reserve's rate trajectory.

The dollar index =USD, which measures the U.S. currency against six major peers, was flat at 97.81, following the unexpected decline in U.S. factory-gate prices. USD/

Typically, lower interest rates from the Fed weaken the U.S. dollar. As the dollar declines, dollar-denominated metals become cheaper for buyers using other currencies, which can support increased demand.

Top global miner BHP's focus on expanding its own copper assets means that it is unlikely to pounce on the planned merger between Anglo American and Teck Resources.

In the past year, BHP invested $2 billion for a stake in Canada's Lundin, gaining access to two copper projects in Argentina, while also working to boost production at top copper mine Escondida in Chile.

Among other London metals, aluminium CMAL3 edged up 0.06% to $2,626.5 a ton, lead CMPB3 gained 0.1% to $1,989, and zinc CMZN3 increased 0.07% to $2,888.5, while nickel CMNI3 lost 0.27% to $15,105, and tin CMSN3 eased 0.31% to $34,500.

SHFE aluminium SAFcv1 climbed 0.38% to 20,865 yuan, lead SPBcv1 rose 0.24% to 16,880 yuan, tin SSNcv1 gained 0.5% to 270,830 yuan, and zinc SZNcv1 increased 0.34% to 22,245 yuan, while nickel SNIcv1 eased 0.05% to 120,430 yuan.

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TOP/MTL or MET/L

DATA/EVENTS (GMT)
1215 EU ECB Refinancing Rate, Deposit Rate Sep

1230 US Core CPI MM SA, YY NSA Aug

1230 US CPI MM SA, YY NSA Aug

1230 US CPI Wage Earner Aug

1230 US Initial Jobless Clm 6 Sep, w/e

($1 = 7.1226 Chinese yuan)

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