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METALS-Shanghai copper hits 6-month low as shorts increase

(Updates position data, prices) BEIJING, March 21 (Reuters) - Shanghai copper prices fell for a fourth day on Wednesday, marking their lowest close in almost six months amid fears of a trade war as investors waited for news on a U.S. interest rate hike. Short positions held by brokerages on the most traded May copper contract on the Shanghai Futures Exchange (ShFE) rose by almost 3,000 lots to 104,540 lots on Wednesday and now exceed long positions by more than 18,000 lots, ShFE data show. Markets are waiting to take their cue from the Federal Reserve's decision on interest rates later in the day, Malcolm Freeman, CEO of Kingdom Futures, wrote in a note. Higher U.S. rates may support a rising dollar, which would limit demand for dollar-denominated commodities such as copper from buyers paying with other currencies. "Aside from this there is also the growing paranoia around the possibility of a global trade war which appears in balance to be frightening the more speculative investors away from the sector," Freeman added.

FUNDAMENTALS

* SHFE COPPER: The May contract ended down 1.5 percent at 50,580 yuan ($7,989.13) a tonne, its lowest close since Sept. 22. Earlier in the session, it touched a low of 50,470 yuan and is down 4.5 percent so far this month.

* LME COPPER: Three-month copper on the London Metal Exchange gave up early gains to trade down for a fifth session, falling 0.5 percent to $6,728 a tonne, as of 0725 GMT. It earlier touched a fresh three-month low of $6,720.

* INVENTORIES: LME copper stocks <MCUSTX-TOTAL> grew by a further 3,200 tonnes on Tuesday to 322,475 tonnes, bringing this month's rise to 61 percent.

* COPPER: Workers at Antofagasta PLC's Los Pelambres copper mine in Chile have opted to extend a period of government mediation in an effort to reach agreement on a new labor contract, an industry group said on Tuesday.

* ALUMINIUM: Global primary aluminium output excluding China dipped to 2.009 million tonnes in February from a revised 2.221 million tonnes in January, International Aluminium Institute (IAI) data showed on Tuesday.

* TARIFFS: The United Arab Emirates is asking Washington to exempt it from new U.S. tariffs on aluminium and steel and believes it has a strong case, a senior government official said on Tuesday. For the top stories in metals and other news, click or

MARKETS NEWS

* A hush settled over financial markets on Wednesday as investors counted down to a likely hike in U.S. interest rates and guidance on how many more to expect this year, while trade war fears kept export nations' currencies on edge.

PRICES

BASE METALS PRICES 0725 GMT Three month LME copper 6728 Most active ShFE copper 50580 Three month LME aluminium 2076.5 Most active ShFE aluminium 13925 Three month LME zinc 3195.5 Most active ShFE zinc 24400 Three month LME lead 2361.5 Most active ShFE lead 18340 Three month LME nickel 13385 Most active ShFE nickel 101480 Three month LME tin 20715 Most active ShFE tin 143300

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 1006.9 LME/SHFE ALUMINIUM LMESHFALc3 -1360.34 LME/SHFE ZINC LMESHFZNc3 431.94 LME/SHFE LEAD LMESHFPBc3 152.52 LME/SHFE NICKEL LMESHFNIc3 1180.43

($1 = 6.3311 Chinese yuan)

(Reporting by Tom Daly; Editing by Richard Pullin and Sherry Jacob-Phillips)