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METALS-Copper slides 4% on virus worries, surge in inventories

(Updates prices)

LONDON, Oct 1 (Reuters) - Copper prices tumbled more than 4% on Thursday, to their lowest in more than a month, as worries about rising inventories and increasing COVID-19 cases overshadowed hopes for a new inflow of U.S. stimulus.

Speculators scrambled to liquidate long positions while prices also slid to levels that tripped automatic sell orders, traders said.

Last week, data showed speculators had boosted their net long positions in Comex copper by 10,611 contracts to 87,308, the highest since January 2018.

Investors were still trying to digest a more than doubling of London Metal Exchange (LME) copper inventories over the past week, raising questions about the strength of demand.

“A reassessment is taking place. Maybe the market was not as tight physically as we thought, and premiums are also coming off in China,” said independent consultant Robin Bhar.

“A lot of the data seem to be showing this recovery, but there’s still a lot of uncertainty until we get a vaccine.”

Three-month LME copper had slumped 4.6% to $6,366 a tonne by 1600 GMT, the weakest since Aug. 17 and the biggest one-day loss since March 18.

Comex copper for December, the most active contract, shed 5% to $2.88 a lb.

Alastair Munro at broker Marex Spectron said in a note that physical users typically rebalance at the start of the month and last month there was heavy selling during the first few days of September.

Low liquidity likely created higher volatility with Chinese markets closed, including the Shanghai Futures Exchange, during Oct. 1-8 for the Golden Week holiday.

* In China, the Yangshan import premiums SMM-CUYP-CN for copper have more than halved since May to $50.50 a tonne.

* Canada’s Lundin Mining, owner of the Candelaria copper mine in Chile, requested government mediation in a last-ditch effort to stave off a strike.

* LME aluminium shed 1.4% to $1,740 a tonne, nickel slipped 1.2% to $14,345 and lead dropped 1.7% to $1,794. Zinc eased 3.1% to $2,328.50, the weakest since Aug. 5, while tin lost 0.8% to $17,350.

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Additional reporting by Mai Nguyen; Editing by Jane Merriman and Pravin Char