METALS-Copper sets record high ahead of Fed rate decision

(Recasts as copper sets record high)

SHANGHAI, Dec 8 (Reuters) - Copper opened the week strong, setting a record high on Monday, bolstered by expectations of an interest rate cut by the U.S. Federal Reserve and prospect of supply tightness.

The most-active copper contract on the Shanghai Futures Exchange closed daytime trading 1.54% higher to 92,970 yuan ($13,152.91) per metric ton.

The Shanghai copper registered an all-time high at 93,300 yuan earlier this session.

The benchmark three-month copper on the London Metal Exchange also gained, up 0.79% to $11,712 a ton as of 0700 GMT, after setting a peak at $11,771 earlier.

Markets are pricing in a quarter-point U.S. interest rate cut on Wednesday. A Reuters poll of 108 analysts found only 19 voted for no change.

Signs of lower supply helped buoy copper prices in Asia. Deliverable copper in SHFE sheds declined 9.22% by the end of last week, the exchange's weekly stock report showed on Friday - the second consecutive week of declines.

Cancellations were also seen in available, or on warrant copper stocks in LME warehouses last week.

Meanwhile, copper inventories in the U.S. Comex exchange continued to increase after hitting a record high in late November, totalling 436,853 short tons (396,306 metric tons) as of Friday.

Copper's strength is rooted in a structural mismatch between supply and available stocks as a persistent Comex-LME premium has diverted the metal towards the U.S., tightening supply in the rest of the world, analysts at Chinese broker GF said in a note.

Supply concerns are also fuelled by mine disruptions and China's major smelters agreeing to slash output by 10%.

Analysts at Citi said in a report on Friday that they expect copper to climb into next year and average about $13,000 a ton by the second quarter of next year, up from $12,000 in their previous outlook.

Most base metals saw their prices gain on Monday.

Among other SHFE base metals, aluminium nudged 0.27% higher, zinc gained 0.98%, lead added 0.23%, and tin gained 0.36%.

Among LME metals, aluminium rose 0.57%, zinc gained 0.82%, lead added 0.45%, tin increased 0.72%, and nickel posted sole loss, nudging 0.17% lower. ($1 = 7.0684 Chinese yuan renminbi) (Reporting by Dylan Duan and Lewis Jackson; Editing by Sonia Cheema)