METALS-LME copper prices decline due to guarded Fed, weak demand

Pratima Desai

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

* Premium for cash over 3-month nickel flares out (Recasts, adds comment, changes dateline from Singapore)

LONDON, Sept 19 (Reuters) - Copper prices eased on Thursday as the market focused on weak demand in top consumer China and a meeting in Washington between Chinese and U.S. officials aimed at resolving a prolonged trade dispute.

Benchmark copper on the London Metal Exchange was down 0.4% at $5,790 a tonne at 0937 GMT.

"Macro sentiment is the major influence on metals at the moment," Liberum analyst Ben Davis said. "Nothing rings alarm bells on the fundamentals. Chinese demand has been weak, but it's nothing catastrophic."

TRADE: U.S. and Chinese officials resume face-to-face talks for the first time in nearly two months as the world's two largest economies try to bridge policy differences and find a way out of a bitter trade war.

The negotiations on Thursday and Friday are aimed at laying the groundwork for high-level talks in early October that will determine whether the two countries are working towards a solution or are headed for new, higher tariffs on each other's goods.

RATES: The U.S. Federal Reserve cut interest rates on Wednesday to help sustain a record-long economic expansion but signaled a higher bar to further reductions in borrowing costs.

Describing the U.S. economic outlook as "favorable," Fed Chair Jerome Powell said the rate cut was designed "to provide insurance against ongoing risks" including weak global growth and resurgent trade tensions.

"Whilst the 25 basis point cut was expected, that policymakers are split on further easing action has caught the market off guard," analysts at Marex Spectron said in a note.

TECHNICALS: Price support for copper comes in at the 21-day moving average around $5,760. Upside moves face the 50-day moving average around $5,830 followed by the 100-day moving average at $5,900.

NICKEL: The premium for the cash over the three-month contract ended at $105 a tonne on Wednesday after flaring out to $150, near the $163 hit last week, the highest since April 2009.

Traders said the rise was due to nervousness about availability of the steel-making ingredient on the LME market due to one company holding large numbers of warrants <0#LME-WHL> and falling stocks in LME-approved warehouses <MNISTX-TOTAL>.

Three-month nickel was up 0.3% at $17,245 a tonne.

PRICES: Aluminium gained 0.2% to $1,790, zinc fell 0.9% to $2,301, lead slipped 0.4% to $2,082 and tin ceded 0.5% to $16,595 tonne.

(Reporting by Pratima Desai; Additional reporting by Mai Nguyen; Editing by Dale Hudson)