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METALS-Copper firms on risk appetite fuelled by easing trade tensions

Zandi Shabalala

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

LONDON, Dec 30 (Reuters) - Copper prices rose on Monday, holding near eight month highs on the back of easing global trade tensions and as top metals consumer China unveiled a measure to support flagging economic growth.

In holiday-thinned trade, benchmark copper on the London Metal Exchange (LME) inched 0.1% higher at $6,222 a tonne by 1211 GMT. The metal widely used in power and construction was near its highest since May and was headed for its biggest monthly rise in two years.

"We have seen the market firm on risk appetite, with the trade war tension easing and some greenshoots in China," said Saxo Bank commodity strategist Ole Hansen.

China's central bank will use the loan prime rate (LPR) as a new benchmark for pricing existing floating-rate loans, in a step that analysts say could help lower borrowing costs and underpin economic growth.

The world's second largest economy has been hurt by a prolonged trade dispute that eased earlier this month when Washington and Beijing agreed to sign a phase one deal.

TRADE: Ahead of an official signing of a deal, China approved two new genetically modified crops for import on Monday that could boost agricultural purchases from the United States, while renewing permits for 10 others, the agriculture ministry said.

POLL: A Reuters poll showed that China's factory activity likely expanded again in December on stronger external demand and an infrastructure push at home, but the pace of growth is set to ease as markets await more certainty on a U.S.-China trade truce.

COPPER INVENTORIES: Copper stocks in warehouses approved by the LME eased to 147,125 tonnes. <MCUSTX-TOTAL>

DOLLAR: The U.S. currency eased against a basket of major currencies. A weaker greenback makes dollar-denominated commodities cheaper for non-U.S. firms, a relationship used by funds to generate buy and sell signals.

ALUMINIUM SUPPLY: Norsk Hydro said it had resumed bauxite production in Brazil and was ramping up alumina output. No negative customer impact was expected and the financial and operational impact has been limited, the company said.

ALUMINIUM PRICES: Three-month aluminium on the LME snapped a six-session winning streak and fell from its highest since mid-September, down 0.3% to $1,820 per ounce.

OTHER PRICES: Zinc gained 0.2% to $2,309 a tonne, lead was steady at $1,940, tin slipped 0.6% to $17,025 while nickel rose 0.4% to $14,270.

(additional reporting by Tom Daly; editing by Louise Heavens)