METALS-Copper ticks up in cautious trade, Fed meeting in focus
* Copper rises 0.2 pct, trades near Friday's 5-week low
* Fed expected to begin scaling back quantitative easing
* Expectations of higher supplies weigh on copper
(Recasts, updates prices)
SINGAPORE, Sept 17 (Reuters) - Copper edged higher on Tuesday but stayed close to five-week lows in cautious trade ahead of a U.S. Federal Reserve policy meeting at which the central bank is widely expected to begin rolling back its monetary stimulus.
Asian shares slipped and the dollar firmed as global markets braced for the outcome of the Fed's two-day policy meeting that starts on Tuesday.
Three-month copper on the London Metal Exchange rose 0.2 percent to $7,099.75 a tonne by 0704 GMT. It fell to $7,024 a tonne on Friday, its weakest since Aug. 8.
The most-traded December copper contract on the Shanghai Futures Exchange closed 0.2 percent higher at 51,460 yuan a tonne.
Despite a lacklustre August jobs report, the Fed is expected to begin scaling back its quantitative easing scheme by reducing its monthly asset purchases by about $10 billion from the current $85 billion.
"Both institutional and retail investors are acting with much caution ahead of the Fed meeting, and I think the majority in the market are anticipating some form of stimulus reduction during this round of policy meeting," said Joyce Liu, investment analyst with Phillip Futures in Singapore.
"That would mean a slower expansion in monetary base available for financing, which metals trading is highly dependent on, and possibly a slower pace of economic growth in U.S. in the immediate future."
Expectations of higher supplies are also dragging on copper, which has dropped almost 11 percent so far this year.
Peru is likely to more than double its copper output by the end of 2016 as several large mining projects start production, government data and industry analysts said.
Hedge funds and money managers slashed bullish bets in the copper futures and options markets for the week ended Sept. 10, pressured by expectations that the Fed will begin to unwind its monetary stimulus.
On Monday, copper prices rose as investor appetite for risk improved on signs of progress in Syria following a Russia-brokered deal aimed at averting U.S. military action.
Benchmark lead was little changed on Tuesday at $2,054.50 per tonne, after falling for the last six sessions, weighed down by rising stocks.
Inventories <0#MPBSTX-LOC> of the metal shot up by 49,475 tonnes at LME-registered warehouses in the Dutch port of Vlissingen in one day last week. It was the biggest daily rise in lead stocks since 1970, LME data showed on Friday.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Three month LME tin
(Editing by Himani Sarkar and Muralikumar Anantharaman)