METALS-Shanghai copper gains ahead of Fed rate decision

SHANGHAI, Dec 8 (Reuters) - Shanghai Copper opened the week higher on Monday, bolstered by expectations of an interest rate cut by the U.S. Federal Reserve.

The most-active copper contract on the Shanghai Futures Exchange SCFcv1 was up 0.52% at 92,040 yuan ($13,020.78) per metric ton as of 0215 GMT.

In contrast, the benchmark three-month copper on the London Metal Exchange CMCU3 ticked 0.23% lower to $11,593 a ton.

Markets are pricing in a quarter-point U.S. interest rate cut on Wednesday. A Reuters poll of 108 analysts found only 19 voted for no change.

Signs of lower supply helped buoy copper prices in Asia. Deliverable copper in SHFE sheds declined 9.22% by the end of last week, the exchange's weekly stock report showed on Friday - the second consecutive week of declines.

Cancellations were also seen in available, or on warrant copper stocks in LME warehouses last week. MCUSTX-TOTAL

Meanwhile, copper inventories in the U.S. Comex exchange HG-STX-COMEX continued to increase after hitting a record high in late November, totalling 436,853 short tons (396,306 metric tons) as of Friday.

Copper’s strength is rooted in a structural mismatch between supply and available stocks as a persistent Comex–LME premium has diverted the metal towards the U.S., tightening supply in the rest of the world, analysts at Chinese broker GF said in a note.

Supply concerns are also fuelled by mine disruptions and China's major smelters agreeing to slash output by 10%.

Among other SHFE base metals, aluminium SAFcv1 dropped 0.70%, tin SSNcv1 tumbled 1.17%, zinc SZNcv1 was unchanged, while lead SPBcv1 and nickel SNIcv1 were little changed.

Among LME metals, aluminium CMAL3 was down 0.33%, nickel CMNI3 dropped 0.50%, tin CMSN3 declined 0.67%, zinc CMZN3 was little changed and lead CMPB3 posted gains of 0.22%.

Monday, December 8

DATA/EVENTS (GMT)

0700 Germany Industrial Output MM, YY SA Oct

0745 France Reserve Assets Total Nov

($1 = 7.0687 Chinese yuan renminbi)