US copper recovers from 6-month low ahead of Fed

NEW YORK Aug 5 (Reuters) - Follow-through liquidation helped push the price of copper to a new six-month low below $3.40 a lb in New York futures trade on Tuesday.

However, a bout of consolidation helped prices recover from their session lows ahead of a U.S. Federal Reserve decision on interest rates and accompanying policy statement.

NOTE: For detailed report, click on [MET/L].

* Copper for September delivery HGU8 settled down 2.30 cents at $3.4170 a lb on the New York Mercantile Exchange's COMEX division.

* The session range ran from $3.4595 to $3.3765, the September contract's lowest price point since Feb. 7.

* After the COMEX close, the Federal Reserve held its benchmark federal funds rate steady at a low 2 percent, as expected. [ID:nN05325113]

* In a statement, the Federal Open Market Committee said it expects U.S. inflation to moderate later this year.

* "I think that it's going to put a lot of volatility into the market. It's not going to drive it one way or the other. It was a pretty much as expected report by the Fed, and I think it will remind people how specifically problematic inflation is right now," said Wisdom Financial's senior trader, Zachary Oxman.

* The dollar trimmed gains against the euro following the Fed's decision and announcement that the U.S. growth outlook remained "highly uncertain."

* The euro EUR= edged higher against the dollar to $1.5485 from $1.5460 before the rate decision.

* Copper down nearly 16 percent from its early-July peak above $4.00 a lb, amid mounting concerns that a slower economic growth environment will curb demand for industrial metals.

* The market's demand concerns have been reflected in the almost-daily inventory builds in London warehouses and waning consumption from Chinese buyers ahead of the Beijing Olympic Games.

* London Metal Exchange (LME) warehouse stocks jumped 2,550 tonnes to 148,750 tonnes on Tuesday. Stockpiles are up over 25,000 tonnes during the month of July.

* COMEX copper stocks edged up 23 short tons to 6,323 short tons on Monday.

* COMEX estimated final futures volumes at 21,527 lots, compared with Monday's official count at 27,632 lots.

* Open interest increased by 1,061 lots to 110,690 open contracts as of August 4.

* Chinese copper smelters have failed in their bid to reinstate a tax break on concentrate imported for refining and reexport, smelter officials said on Tuesday, suggesting modest exports are unlikely to rise. [ID:nHKG278974]

* LME copper for delivery in three-months MCU3 last traded at $7,610 a tonne, unchanged from Monday's settlement. Earlier in the session, the metal hit a new six-month low at $7,530. (Reporting by Chris Kelly)