* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Updates throughout, changes dateline from SINGAPORE)
LONDON, Nov 29 (Reuters) - Nickel hit a more than four month low on Friday and was on track for its steepest monthly loss in eight years as steel output from top producer Chinese faltered and the impact of an Indonesian ore export ban waned.
Benchmark nickel on the London Metal Exchange (LME) was down 1.1% to $13,855 a tonne at 1250 GMT, after touching its lowest since July 16.
Prices for the metal used in stainless steel had climbed to their highest in five years in September after top producer Indonesia brought forward a ban on ore exports.
"We were always of the view that the initial rally after the ban was announced was overdone and a lot of it reflected speculative activity rather than actual demand in the physical market," said Capital Economics analyst Keiran Clancy.
"What has reversed that is a drop off in operating rates at stainless steel mills in China and other indicators flashing red that may have prompted investors to liquidate their long positions."
INVENTORIES: On warrant stocks of nickel in LME-registered warehouses are up about 54% to 44,772 tonnes since they hit a 2007 low in October but are still down nearly 70% this year. <MNISTX-TOTAL>
SPREADS: Cash LME nickel was trading at a discount of $40-a tonne to the three month contract, indicating supplies are plentiful. <CMNI0-3>
CONSUMPTION: Nickel has come under pressure from worries about demand from stainless steel mills, mostly located in China, which account for roughly two thirds of consumption estimated at about 2.4 million tonnes this year.
JAPAN: A global aluminium producer has offered Japanese buyers a premium of $92 per tonne for January-March primary metal shipments, down 5.2% from the current quarter, four sources said.
Japan is Asia's biggest importer of the metal used in packaging and aircraft.
TIN BALANCE: The global tin market will narrow its deficit to 1,900 tonnes next year from a 20,000 tonne shortage in 2019, the International Tin Association said.
TRADE WAR: Metals were dragged down by a new U.S. law backing Hong Kong protesters which prompted market concern that the move could torpedo efforts to end the U.S.-China trade war.
OTHER PRICES: LME copper fell 0.2% to $5,882 a tonne, aluminium gained 0.1% to $1,754, zinc eased 0.1% to $2,275, lead gained 0.5% to $1,955, while tin slipped 0.3% to $16,370. (Reporting by Zandi Shabalala; Editing by Mark Potter)