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METALS-London copper gives up gains as U.S.-Iran tensions weigh

(Recasts, updates prices, adds ShFE stocks data) BEIJING, June 21 (Reuters) - London copper prices pared early gains to trade lower on Friday as the base metals complex declined amid concerns over rising political tensions between the United States and Iran. U.S. President Donald Trump approved military strikes against Iran on Friday in retaliation for the downing of a U.S. surveillance drone, but called off the attacks at the last minute, the New York Times reported. Copper is still on course for a 2.4% gain in London this week, in what would be its best week since the week ended March 29, buoyed by the impending restart of trade talks between the United States and China and signs the Federal Reserve may cut interest rates as early as next month. "Copper has also found support from strike action at the Chuquicamata copper mine in Chile," ANZ wrote in a note. Unions at Chuquicamata have called on members to reject a sweetened contract offer from Codelco, the world's largest copper producer, amid a nearly week-long strike that has halved output from the mine.

FUNDAMENTALS

* COPPER: Three-month copper on the London Metal Exchange rose as much as 0.5%, crossing the $6,000 a tonne mark, but was trading down 0.2% at $5,964 as of 0720 GMT. The metal had hit a near one-month high of $6,027 in London on Thursday. The most-traded August copper contract on the Shanghai Futures Exchange ended flat on 46,850 yuan ($6,821.89) a tonne.

* STOCKS: Copper inventories in warehouses monitored by the ShFE fell 3.4% from a week earlier to 134,747 tonnes, the exchange said on Friday.

* ZAMBIA: Vedanta Resources said it would take urgent steps to protect its Zambian copper assets and pursue international arbitration if necessary after a Lusaka court rejected its request to be included in liquidation proceedings.

* LYNAS: Australia's Lynas Corp on Friday said it was stockpiling production of a major rare earth element as prices have jumped in recent weeks on rising supply concerns amid trade tensions.

* OTHER METALS: London nickel retreated sharply from a three-week top struck on Thursday, slipping 1.2% to $12,150 a tonne, while zinc was down 1.3%. In Shanghai, zinc ended down 1.4% and nickel lost 1.5%.

* NICKEL: The global nickel market deficit narrowed to 9,400 tonnes in April from a revised shortfall of 14,200 tonnes in the previous month, the International Nickel Study Group (INSG) said on Thursday.

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MARKETS NEWS

* Asian stocks slipped, as U.S.-Iran tensions and anxieties over Sino-U.S. trade talks left markets in the region struggling to match the euphoria on Wall Street over a possible U.S. interest rate cut next month.

PRICES

BASE METALS PRICES 0726 GMTThree month LME copper 5960Most active ShFE copper 46840Three month LME aluminum 1772Most active ShFE aluminum 13765Three month LME zinc 2436Most active ShFE zinc 19450Three month LME lead 1899.5Most active ShFE lead 16000Three month LME nickel 12150Most active ShFE nickel 98300Three month LME tin 19020Most active ShFE tin 144230

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 581.2LME/SHFE ALUMINIUM LMESHFALc3 -92.3LME/SHFE ZINC LMESHFZNc3 167.08LME/SHFE LEAD LMESHFPBc3 763.52LME/SHFE NICKEL LMESHFNIc3 1712.99

($1 = 6.8676 Chinese yuan)

(Reporting by Tom Daly; editing by Subhranshu Sahu & Uttaresh. V)