METALS-Possibility of US-China trade deal, weaker dollar give a boost to base metals

Updates prices

By Polina Devitt

LONDON, Feb 20 (Reuters) - Base metals rose in London on Thursday as worries about the probability of a global trade war were put on pause after U.S. President Donald Trump said a new trade deal with top metals consumer China was possible.

Three-month aluminium CMAL3 on the London Metals Exchange(LME) was up 1.5% at $2,726 a metric ton by 1716 GMT after hitting $2,729 for its highest since November 15.

LME copper CMCU3 rose 0.8% to $9,539 a ton. The metal broke above its 200-day moving average this week which now supports it at $9,432.

Aluminium extended gains to a fifth consecutive session supported by an upcoming ban on Russian primary aluminium imports to the European Union.

"Any impact of the ban is likely to be limited. Although the EU continues to import Russian aluminium, volumes have fallen, with European buyers self-sanctioning since the invasion of Ukraine," said Ewa Manthey, a commodities analyst at ING.

"This comes as the U.S. conducts talks with Russia on a peace deal to end the war in Ukraine. The U.S. has signalled that sanctions relief could be part of an agreement," she added.

The U.S. currency weakened making dollar-priced metals more attractive for buyers using other currencies. The yuan rose. FRX/

Indicating that concerns about the possibility of trade wars got only a short-term relief, Trump said on Wednesday he would announce fresh tariffs over the next month or sooner, adding lumber and forest products to previously announced plans to impose duties on imported cars, semiconductors and pharmaceuticals.

"Tariffs are bearish for copper and other industrial metals in the context of slowing global growth and keeping inflation higher for longer," Manthey said.

LME zinc CMZN3 rose 1.3% to $2,912 a ton, nickel CMNI3 gained 1.6% to $15,640, tin CMSN3 climbed 2.3% at $33,455 after hitting its highest since October 8, while lead CMPB3 fell 0.3% to $1,992.

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