METALS-Nickel gains on Philippine ban proposal, copper slips

* Philippine senator urges unprocessed ore export ban

* Newmont steps closer to copper concentrate exports

* Coming Up: U.S. Durable Goods for July at 1400 GMT

(Recasts, updates prices, adds details/quotes; changes dateline)

LONDON, Sept 3 (Reuters) - Nickel prices rose on Wednesday on news that a Philippine senator had urged a ban on unprocessed mineral ore exports, while copper slipped on higher exchange stocks and investors downplayed signs of progress towards peace in eastern Ukraine.

Ukraine said earlier it had reached agreement with Russia on a "permanent ceasefire" in its eastern Donbass region, but the Kremlin countered that Russia was not party to the conflict so couldn't agree a ceasefire, though it had agreed on steps towards peace.

"This news about Russia and Ukraine, the immediate impact you're more likely to see through oil and precious metals for one, and secondly, its not clear what it means," said BNP Paribas analyst Stephen Briggs.

Looking more specifically at copper's fundamentals, he said: "Copper took a hit when LME stocks (data) came out. If the surplus is going to become more visible through exchange stocks, that would be meaningful. Its too early to say ... but the fact is copper has been in a bear market for 3-1/2 years."

In nickel by contrast, the case to buy was bolstered by news of a Philippine senator filing a bill urging a halt to exports of unprocessed mineral ores.

The proposed halt is similar to a ban introduced by Indonesia from January that led to a sharp spike in nickel prices and cut other ore exports.

Most analysts expect to see a deficit in nickel next year and so the Philippine news worried investors, even though there was little sense of whether the bill would find popular support, or any timescale on whether exports could be banned.

"This is one senator introducing what we would call a private members bill. Its far too early to say whether it will gain traction," said Briggs.

Analyst Lachlan Shaw of Commonwealth Bank of Australia said: "One thing the market loses sight of, is that in three to four years' time, there will be a very significant amount of nickel coming out of Indonesia."

LME nickel traded up 0.62 percent at $18,665 a tonne at 1014 GMT. Prices, which are up by one third in the year to date, have mostly traded in a $18,400-$20,000 band since May.

LME copper slipped by 0.67 percent to $6,925 a tonne. Prices have struggled to gain headway since hitting a one-week low of $6,913.25 last week, with expectations of fresh supply dampening investor interest.

Daily LME data out earlier showed stocks rose by 7,000 tonnes to 154,825 tonnes - their highest since July 22, and making for two weeks of near straight increases. <MCU-STOCKS>

Newmont Mining Corp has reached a tentative agreement with the Indonesian government on contract renegotiations, the CEO of the firm's local unit said, as both sides moved closer to ending an eight-month tax dispute that halted copper exports.

"Certainly if Grasberg and Batu Hijau came back, that introduces 500,000-600,000 tonnes on an annualized basis into the market - it's certainly enough to weigh on prices," said Shaw.

Elsewhere, expectations of further policy action at the European Central Bank's meeting on Thursday were underpinning metals after ECB President Mario Draghi pledged to use all available tools to keep prices in check.

Data earlier showed euro zone retail sales slowed in July, while business grew at the slowest rate this year in August, adding to worries about euro zone economic growth, which ground to a halt in the second quarter.

Looser policy in Europe would cheapen liquidity for industry and investors who may raise their holdings of hard assets given they tend to hold their value when paper currency depreciates.

In other metals, aluminum hovered near its most expensive since February 2013 above $2,100 a tonne, while LME zinc was slightly down from a four-week top of $2,391.25 struck the prior session.

A partial closure of capacity at an aluminum smelter in China helped to drive up domestic prices of the metal by as much as 4 percent this week, as investors scramble to compensate for an expected shortfall in supply.


Three month LME copper

Most active ShFE copper

Three month LME aluminum

Most active ShFE aluminum

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Three month LME tin

(Additional reporting by Melanie Burton, editing by David Evans)