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METALS-Copper hovers near 3-month low ahead of U.S.-China trade talks

MANILA, May 9 (Reuters) - Shanghai industrial metals fell in early trade on Thursday, while benchmark London copper hit its lowest in nearly three months, as investors sought safety ahead of crucial trade talks between the United States and China.

The two sides will hold two-day negotiations in Washington from Thursday, with U.S. President Donald Trump's threat to increase tariffs on $200 billion worth of Chinese goods on Friday raising the risk of an escalation in the trade spat.

The bruising trade war, which has slowed the global economy, has clouded the outlook for demand from top metals consumer China.

Ahead of the talks, Trump said Beijing "broke the deal" in negotiations with Washington and would face stiff tariffs if no agreement was reached.

Benchmark copper on the London Metal Exchange was down 0.1 percent at $6,142.5 a tonne by 0126 GMT, after touching its lowest since Feb. 15 at $6,114.50.

FUNDAMENTALS

* The most-traded copper contract on the Shanghai Futures Exchange fell as much as 0.7 percent to 47,560 yuan ($7,012.89) a tonne.

* ShFE zinc dropped as much as 1.8 percent to 20,995 yuan a tonne.

* IRAN: Trump on Wednesday imposed new sanctions on Iran, targeting revenue from its exports of industrial metals, the latest salvo in tensions between Washington and Tehran over a 2015 international accord curbing the Islamic Republic's nuclear program.

* GRAPHIC: The world's biggest diversified miners have yet to see their share prices reflect their role as providers of the minerals needed for a shift to a low-carbon economy.

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MARKETS NEWS

* Asian shares hit six-week lows in early trade on Thursday as increased tensions ahead of key Sino-U.S. trade negotiations fanned fresh concerns about the outlook for the global economy.

DATA/EVENTS (GMT)

0130 China PPI YY April

0130 China CPI YY April

1200 Brazil Retail Sales YY March

1230 US International Trade March

1230 US Initial Jobless Claims Weekly

1230 France Reserve Assets Total April

PRICES

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

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS

($1 = 6.7818 Chinese yuan)

(Reporting by Enrico dela Cruz; Editing by Shreejay Sinha)