(Updates prices, adds comments)

BEIJING, May 22 (Reuters) - Copper prices fell on

Wednesday on softening physical demand and higher inventories in

top consumer China and as investors were cautious ahead of the

release of minutes of the Federal Reserve's latest meeting.

Three-month copper on the London Metal Exchange (LME)

was down 1% to $10,750 per metric ton by 0613 GMT.

The most-traded June copper contract on the Shanghai Futures

Exchange (SHFE) lost 1.1% to 86,160 yuan ($11,903.35) a

ton.

Both contracts had hit record highs on Monday amid copper

concentrate supply shortages and demand optimism.

But a lack of fundamental support cooled the rally, which

had dampened consumption from copper users, traders said.

Discount to buy copper in China's spot market widened to 340

yuan per ton on Tuesday, the biggest since January 2015,

according to Shanghai Metals Market .

Copper warehouse stocks on SHFE stood at 291,020 tons last

Friday, more than four times higher than that in the beginning

of February.

Meanwhile, China's April refined copper output rose on a

daily average basis from the prior month, easing concerns of

smelters' output cut.

The dollar was steady against a handful of peers on

Wednesday, as the market assessed calls for patience from

Federal Reserve officials and awaited the publication of Fed

minutes for more insight on the central bank's interest rate

path.

A stronger dollar makes it more expensive to buy the

greenback-priced commodity.

LME aluminium gained 0.2% to $2,732 a ton, nickel

dropped 0.4% to $21,215, zinc dipped 0.1% to

$3,135, tin decreased 0.1% to $34,300, while lead

gained 0.5% to $2,348.50.

SHFE aluminium climbed 0.7% to 21,285 yuan a ton,

zinc advanced 0.4% to 24,790 yuan, tin shed

0.2% to 277,120 yuan, lead fell 2% to 18,525 yuan, and

nickel was 0.5% lower to 157,010 yuan.

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DATA/EVENTS (GMT)

0600 UK Core CPI YY April

0600 UK CPI YY April

1400 US Existing Home Sales April

1800 US Federal Open Market Committee issues

minutes from its meeting of April 30-May 1

($1 = 7.2383 Chinese yuan renminbi)

(Reporting by Siyi Liu and Mei Mei Chu; Editing by Mrigank

Dhaniwala)