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Aluminium, nickel prices fall on caution ahead of U.S. data

Shanghai aluminium and nickel prices fell on Tuesday, as investors reduced exposure ahead of key U.S. inflation data and following a supply shortage-driven rally in both metals.

The most-traded October aluminium contract on the Shanghai Futures Exchange SAFcv1 fell 4.3% to 22,365 yuan a tonne at 0613 GMT, retreating after eight straight sessions of gains.

ShFE nickel SNIcv1 dropped as much as 4.3% to 146,280 yuan a tonne, retreating from its record high of 155,140 yuan a tonne hit two sessions earlier.

ShFE copper SCFcv1 fell 1.9% to 69,930 yuan a tonne, zinc SZNcv1 declined 1.8% to 22,590 yuan a tonne and lead SPBcv1 decreased 1.6% to 14,895 yuan a tonne.

On the London Metal Exchange, benchmark three-month nickel CMNI3 fell 0.6% to $19,600 a tonne, aluminium CMAL3 shed 1.9% to $2,842.50 a tonne, copper CMCU3 declined 0.8% to $9,488.50 a tonne and lead CMPB3 was down 0.8% at $2,275.50 a tonne.

The U.S. data due later in the day would give more clues to the pace of the world’s biggest economy’s stimulus tightening which could affect financial market’s liquidity, the global economic recovery and the dollar – all of which can impact base metals.

“Selling came in as the session progressed … as option traders and Chinese investors booked profits,” said commodities broker Anna Stablum of Marex Spectron in a note.

“All eyes will be on the U.S. Consumer Price Index numbers later today. In the meantime, concerns about stagflation are intensifying as higher commodity prices meet falling growth rates,” she added.

FUNDAMENTALS
* The premium of LME cash lead over the three-month contract CMPB0-3 contracted to $2.30 a tonne, its smallest since July 19, indicating easing tightness in nearby supply.

* Lithium prices have jumped to their highest in more than three years thanks to an upsurge in electric vehicle sales, depleting stocks of the battery material in top consumer China.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Rashmi Aich)

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