METALS-Copper rebounds after Trump says may seal China deal

Eric Onstad

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Recasts, updates with closing prices)

LONDON, Sept 25 (Reuters) - Copper prices erased losses on Wednesday after U.S. President Donald Trump held out the prospect of end to a trade war with top metals consumer China.

Trump told reporters in New York that a deal to end a nearly 15-month trade war with China could happen "sooner than you think".

Within minutes of the news appearing, copper prices jumped, cancelling out losses suffered partly due to Trump making a hard-hitting speech a day earlier attacking China's trade practices.

Three-month copper on the London Metal Exchange ended the day barely changed, edging up 0.1% to $5,786 a tonne in final open-outcry trading.

The market was still unsettled following the decision by U.S. Democrats on Tuesday to hold impeachment hearings into Trump and the release on Wednesday of a summary of a call Trump made to Ukraine's president asking for a probe into a political rival.

"The markets are not only being driven by the U.S.-China trade issue...(but) the broad risk aversion sentiment due to the latest events in the UK and U.S., maybe primarily in the U.S.," said Xiao Fu, head of commodity market strategy at Bank of China International in London.

"In copper I think there's a tug of war between the macro headwinds and the fundamentals, because inventory levels are quite low, so we may see rangebound trade."

Copper has shed about 4% since touching a 1-1/2 month peak on Sept. 13, weighed down by worries about a slowdown in top metals consumer China as well as U.S.-China trade tensions.

* COPPER STOCKS: On-warrant LME copper inventories - material that is not earmarked for delivery - fell to 183,925 tonnes, the lowest since May 28, data showed. <MCUSTX-TOTAL>

* NICKEL: LME benchmark nickel rose 0.8% to close at $17,325 a tonne after data showing that China's refined nickel imports more than doubled year on year in August and shipments from top producer Indonesia rose 26.5% year on year.

* CHINA STAINLESS STEEL: Chinese stainless steel futures fell 2% in their first session of trading, after Trump's rebuke of China fanned demand concerns. The bulk of nickel is used as an alloy to make stainless steel.

"Consumers (for nickel) have backed off with Chinese analysts pointing to concerns around the state of their stainless steel industry high output, elevated stockpiles," Alastair Munro at broker Marex Spectron said in a note.

* LEAD: LME lead climbed 2.4% to end at $2,107 a tonne, getting support from a large position in LME inventories. Data showed one party had 50%-70% of available LME stocks.<0#LME-WHL>

* DOLLAR: Also weighing on metals markets was a stronger dollar index, making metals priced in the U.S. currency more expensive for buyers using other currencies.

* PRICES: LME aluminium fell 0.6% to close at a three-week low of $1,752 a tonne, zinc gained 0.4% to $2,290 after touching $2,260, also a three-week low, and tin added 0.2% to $16,530.

* For the top stories in metals and other news, click or (Reporting by Eric Onstad; editing by David Evans/Louise Heavens/Susan Fenton/Jane Merriman)