Nov 10 (Reuters) - Copper prices fell on Wednesday as China's October factory gate inflation hit a 26-year high and trimmed hopes of policy easing in the world's biggest consumer of the metal.

Three-month copper on the London Metal Exchange fell 0.2% to $9,535 a tonne by 0442 GMT, while the most-traded December copper contract on the Shanghai Futures Exchange declined 0.7% to 70,030 yuan ($10,945.61) a tonne.

China's producer price index climbed 13.5% from a year earlier in October, a pace not seen since July 1995, as coal prices soared amid a power crunch, further squeezing profit margins for producers and heightening stagflation concerns.

Copper is often used as a gauge of global economic health due to its wide range of usage in many sectors.

FUNDAMENTALS

* LME aluminium rose 0.1% to $2,560 a tonne, while ShFE aluminium dropped 2.3% to 18,600 yuan a tonne and ShFE nickel shed 1.1% to 142,980 yuan a tonne.

* China's October copper cathode output from major smelters fell 2.2% month-on-month due to power curbs and supply chain disruptions, but with smelter maintenance gradually easing and power supplies recovering, November output is likely to rise to around 780,000 tonnes, research house Antaike said.

* Protesters in Peru's Cotabambas province on Tuesday blocked once again a key mining corridor used by MMG Ltd's Las Bambas copper mine, despite a preliminary agreement to keep the road free, a community leader said.

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MARKETS NEWS

* Asian stock markets were becalmed as surges in oil and Chinese factory prices added to worries that a hot U.S. inflation reading could renew pressure on policymakers to lift interest rates.

DATA/EVENTS (GMT)

0700 Germany HICP Final YY Oct

1330 US CPI MM, SA Oct

1330 US Initial Jobless Clm Weekly ($1 = 6.3980 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Ramakrishnan M.)