METALS-Copper falls below $9,000 level, prompting Chinese buying

(Updates prices) By Julian Luk LONDON, July 25 (Reuters) - Copper prices bounced from near four-month lows on Thursday as the dollar slipped after U.S. data showed slowing inflation, leaving expectations of a September interest-rate cut from the Federal Reserve intact. Buyers also returned to top consumer China as prices retreated 15% from the all-time peak in May, providing further support to prices. Three-month copper on the London Metal Exchange CMCU3 traded 0.1% higher at $9,108 per metric ton as at 1631 GMT. It earlier fell below $9,000 level for the first time since April. It pared earlier losses after U.S. personal consumption expenditures (PCE) price index rose at 2.9% for second quarter, slower than 3.7% in the first quarter. Cooling PCE, a tracker of inflation by the Fed, increased the likelihood for an September rate cut to pressure the dollar. =USD Weaker dollar makes greenback priced metals cheaper for holders of foreign currencies, including China which consumes half of the world's copper produced. More copper rod plants in Jiangsu increased production this week as orders flocked in after copper prices retreated past few weeks, a copper buyer source said. "Things are finally moving. Physical copper market is coming back to life after three months of standstill," the source said. Copper premium, the amount a Chinese buyer agreed to pay on top of LME copper prices to import copper, surged to $25 a ton on Thursday, its highest in more than three months. SMM-CUYP-CN Premium, a gauge of physical demand, turned negative when LME prices hit a record high of $11,104.50 in May, meaning copper suppliers had to pay their clients to sell their copper. LME lead CMPB3 was down 0.5% at $2,034.5 a ton, zinc CMZN3 moved 0.1% lower to $2,684, tin CMSN3 slipped 1.2% to $29,440, nickel CMNI3 was flat at $15,830 and aluminium CMAL3 shed 1.1% at $2,275. (Reporting by Julian Luk; Editing by Maju Samuel, Mrigank Dhaniwala and David Evans) (([email protected])) (( For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))