Wires

METALS-Copper hits 1-month low, dollar reinforces negative mood

Pratima Desai

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

* Premium for cash over 3-month nickel at $169 a tonne

* Nickel canceled warrants at 64% of total (Recasts, adds comment, changes dateline from Singapore)

LONDON, Oct 1 (Reuters) - Copper prices hit one-month lows on Tuesday as worries about demand in top consumer China, coupled with a strong dollar, triggered a fresh bout of selling amid low liquidity.

Benchmark copper on the London Metal Exchange was down 1.5% at $5,639 a tonne at 0949 GMT. Earlier prices of the metal used by investors as a gauge of economic health touched $5,630 a tonne, the lowest since Sept 4.

Traders expect volumes to stay low this week due to celebrations in China to mark the 70th anniversary of the founding of the People's Republic.

"Negative investor sentiment has a lot to do with falling prices and the strong dollar is another negative," said Caroline Bain, chief commodities economist at Capital Economics.

"Copper demand is subdued, but it's not falling off a cliff, and the supply picture is constrained. Given the fundamentals copper prices should be higher."

DOLLAR: A rising U.S. currency makes dollar-denominated commodities such as copper more expensive for holders of other currencies, which potentially could weigh on demand.

This is a relationship used by funds who trade using buy and sell signals generated by numerical models.

CHINA: China accounts for nearly half of global copper demand, estimated this year at around 24 million tonnes.

TRADE: The United States and China have been locked in an escalating trade war for nearly 15 months.

They have levied punitive duties on hundreds of billions of dollars of each other's goods, roiling financial markets and threatening global growth and demand for industrial metals.

GROWTH: Data on U.S. manufacturing activity in September due later on Tuesday will be closely watched. The sector contracted in August for the first time since 2016.

ALUMINIUM : Prices of the metal touched $1,713.50 a tonne, the lowest since January 2017, as worries about demand from the transport and packaging industries dominated sentiment.

Aluminum was later down 0.1% at $1,719 a tonne, and has fallen nearly 7% so far this year.

NICKEL: The premium for the cash over the three-month contract ended at $169 a tonne on Monday. It touched $205 a tonne on Sept. 20, the highest since April 2009.

The rise has been fueled by concern about availability of the stainless steel ingredient on the LME, where stocks around 152,000 tonnes are near historical lows.

Reinforcing that are canceled nickel warrants - metal earmarked for delivery - at 64% of the total. <MNISTX-TOTAL>

Three-month nickel slipped 0.1% to $17,025 a tonne.

PRICES: Zinc was down 0.8% to $2,356, lead fell 0.4% to $2,127 and tin rose 0.9% to $16,065. (Reporting by Pratima Desai; Additional reporting by Mai Nguyen; Editing by Jan Harvey)