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Copper strikes two-month low on China need angst

Copper costs struck a two-month low on Wednesday as the dollar held firm and poor demand prospects in top customer China dominated the state of mind, while the market waited for U.S. inflation data.

Standard copper on the London Metal Exchange ( LME) was down 0.2% at $9,143 a metric lot at 1054 GMT from an previously session low of $9,094, a drop of more than 6% given that the U.S. governmental election recently.

The dollar shows no indications of quiting its gains and China stimulus hasn't done much for production, realty or development, a copper trader said.

U.S. consumer cost inflation information due later on Wednesday will be scanned for clues to the frequency and magnitude of future U.S. Federal Reserve rate cuts.

The U.S. currency trading near 6-1/2- month peaks makes dollar-priced metals more expensive for holders of other currencies, potentially suppressing demand.

Frustration with Chinese stimulus in recent months integrated with the possibility of significant U.S. tariffs on imports after Donald Trump's presidential election success are anticipated to keep copper and other commercial metals under pressure.

Trump has threatened 60% tariff on items entering the United States from China, much higher than the levies of 7.5% to 25% he imposed in his first term.

We see a brand-new bear danger - expanded China-centred tariffs, enforced by the incoming Republican celebration, said Liberum analyst Tom Cost. Tariffs were bearish for the product world in 2018-19. They will be bearish once again.

An indicator of muted need in China is the Yangshan premium << SMM-CUYP-CN >, a closely enjoyed indicator of China's. cravings for importing copper, down 30% around $46 a heap because. rising to almost $70 in early October.

Overall, suppressed demand globally has actually been the primary style. in industrial metals market for the majority of this year. It is. shown in the consistent discounts for the cash over the. three-month LME contracts << CMCU0-3 >< CMAL0-3>>

. Aluminium was flat at $2,563 a ton, zinc. fell 0.4% to $2,925, lead slid 0.6% to $2,013, tin. pulled back 1.5% $29,740 and nickel was little. changed at $15,900.

(source: Reuters)