Sept 14 (Reuters) - Shanghai aluminium and nickel prices fell on Tuesday, as investors reduced exposure ahead of key U.S. inflation data and following a supply shortage-driven rally in both metals.
The most-traded October aluminium contract on the Shanghai Futures Exchange closed down 4.5% at 22,320 yuan a tonne, retreating after eight straight sessions of gains.
ShFE nickel dropped 4.1% to 146,540 yuan a tonne, slipping further from its record high of 155,140 yuan a tonne hit two sessions earlier.
ShFE copper fell 2% to 69,840 yuan a tonne, zinc declined 1.8% to 22,585 yuan a tonne and lead decreased 1.6% to 14,890 yuan a tonne.
On the London Metal Exchange, benchmark three-month nickel fell 0.3% to $19,665 a tonne at 0721 GMT, aluminium shed 1.7% to $2,848 a tonne and copper declined 0.7% to $9,490 a tonne.
The U.S. data due later in the day would give more clues to the pace of the world's biggest economy's stimulus tightening which could affect financial market's liquidity, the global economic recovery and the dollar - all of which can impact base metals.
"Selling came in as the session progressed ... as option traders and Chinese investors booked profits," said commodities broker Anna Stablum of Marex Spectron in a note.
"All eyes will be on the U.S. Consumer Price Index numbers later today. In the meantime, concerns about stagflation are intensifying as higher commodity prices meet falling growth rates," she added.
A trader said rising COVID-19 cases in China, the world's biggest metals consumer, also spooked sentiment.
FUNDAMENTALS
* The premium of LME cash lead over the three-month contract
* Lithium prices have jumped to their highest in more than three years thanks to an upsurge in electric vehicle sales, depleting stocks of the battery material in top consumer China.
* For the top stories in metals and other news, click or (Reporting by Mai Nguyen in Hanoi; Editing by Rashmi Aich and Peter Graff)
