METALS-Copper gains on U.S.-China trade talks but gains are limited

Zandi Shabalala

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Updates throughout, changes dateline from SINGAPORE)

LONDON, Nov 19 (Reuters) - Copper rose on Tuesday on hopes that a trade deal between the United States and China could be reached but gains were capped by concern that a full deal was some way off.

Three-month copper on the London Metal Exchange (LME) had risen 0.3% to $5,847 a tonne by 1200 GMT, while most other metals fell.

But the metal, used in power and construction, is down 2.3% so far this year on concerns that the trade war could hurt demand and cut global growth.

Copper prices will likely remain under pressure for the rest of the year, albeit with some short-lived gains, as there are several major issues yet to be resolved in trade negotiations, said Commerzbank analyst Daniel Briesemann.

"Metals prices have been mostly skewed to the downside due to more concerns about the trade dispute."

POSITIONING: Speculative positioning in LME copper remain largely neutral at last Thursday's close, at 1.1% of open interest falling from 12.7% on Oct. 7, estimates by broker Marex Spectron showed.

TECHNICALS: LME copper should remain below the 200- day moving average at $6,021.26 a tonne and the early July high at $6,075 over the next week or so, Commerzbank technical analyst Axel Rudolph said in a note.

CHINA STIMULUS: China will step up credit support to the economy and push real lending rates lower, central bank governor Yi Gang said on Tuesday, in an effort to prop up growth hit by a bruising trade war with the United States.

INDONESIA: Environmental impact studies for factories in Indonesia to produce battery-grade nickel chemicals could be completed by the end of the year, said Indonesia's coordinating minister who oversees mining.

The studies need to be completed and approved before investors can proceed with builds.

COPPER WEEK: The market is closely watching Asia Copper Week, one of the region's biggest industry gatherings, which kicked off in the Chinese commercial hub of Shanghai on Monday.

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

ZINC AND LEAD: During the first nine months of the year, the global zinc deficit narrowed to 156,000 tonnes compared to 272,000 tonnes in the same period last year.

The lead shortage widened to 83,000 tonnes in that period from 34,000 tonnes last year.

COPPER: Freeport McMoRan Inc expects treatment and refining charges for copper concentrates in 2020 to be "well below" last year's levels as Chinese smelting capacity is expected to rise, a senior company executive said.

PRICES: Aluminium shed 0.2% to $1,734 a tonne, zinc ceded 0.4% to $2,335.50, lead rose 1% to $1,973, tin slipped 0.6% to $15,970, while nickel lost 2.1% to $14,525, after touching its lowest since Aug. 5.

(Reporting by Zandi Shabalala, editing by Louise Heavens)