Updates prices

By Mai Nguyen

Aug 27 (Reuters) -Copper prices in London climbed to their highest levels in nearly six weeks on Tuesday, supported by optimism over a potential U.S. interest rate cut in September that could help lift demand for the red metal.

Three-month copper on the London Metal Exchange (LME) CMCU3 was up 0.7%at $9,350 permetric ton, as of 0746 GMT. Earlier in the session, copper increased as much as 1.2% to $9,398 a ton, the highest since July 19.

The most-traded October copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 climbed 0.9% to 75,010 yuan ($10,521.07) a ton, hovering near a three-week high hit in the previous session.

"The rise in copper of late can be attributed to the macro environment. Demand is still lagging behind, but the onshore macro players are looking further beyond," a trader said.

Market participants have been expecting an interest rate cut by the Federal Reserve next month, and the hope was reinforced by Fed Chair Jerome Powell's comments at a key conference last week.

A rate cut tends to boost economic growth and demand for metals, as well as pressure the dollar, which will eventually make greenback-priced metals cheaper for holders of other currencies.

"A lot of the news is priced in already, so the next big jump will have to come from an improvement in fundamental demand. Otherwise it's not sustainable," the trader said.

LME nickel CMNI3 rose 1.4%to $16,995 a ton, aluminium CMAL3 fell 1.2% to $2,512, zinc CMZN3 eased 0.5%to $2,898, tin CMSN3 declined 0.3%to $32,830while lead CMPB3 eased 0.1%to $2,114.

SHFE nickel SNIcv1 increased 1.2%to 132,030yuan a ton, lead SPBcv1 advanced 0.4%to 17,695yuan, while aluminium SAFcv1 fell 0.1%to 19,900yuan, zinc SZNcv1 eased 0.2%to 23,995 yuan and tin SSNcv1 eased 0.2%to 267,200yuan.

The LME cash nickel contract was trading at a discount of $220.10 a ton to the three-month contract, the smallest discount since May 16, indicating tightening nearby supplies. CMNI0-3

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($1 = 7.1295 yuan)

Reporting by Mai Nguyen in Hanoi; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala

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