METALS-Copper steadies on upbeat Chinese data, softer dollar

By Eric Onstad

LONDON, April 16 (Reuters) - Copper prices edged higher on Wednesday as stronger Chinese economic growth and a weaker dollar offset an escalating U.S.-China trade war that is fuelling fears of a demand downturn.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.4% at $9,202.50 a metric ton by 1715 GMT, having finished in negative territory in the previous session.

Copper has fallen 10% from a peak of $10,164.50 on March 26, but it has recovered somewhat since hitting a 16-month low of $8,105 on April 7.

Upbeat data from top metals consumer China supported the market after its first-quarter economic growth outstripped expectations, underpinned by solid consumption and industrial output.

A softer dollar .DXY also steadied the market, making commodities priced in the U.S. currency less expensive for buyers using other currencies. FRX/

Earlier, copper sunk as low as $9,028.50 as base metals joined shares and other risky assets in sliding after Nvidia took a hit from U.S. restrictions on chip sales to China as trade conflict intensified. MKTS/GLOB

"The demand side of the equation looks much softer because of the uncertainties. We don't have full clarity on how far this trade war can really go," said Naeem Aslam, chief investment officer at Zaye Capital Markets.

Eventually, though, China and the U.S. will have to come to a deal, which would be positive for metals, Aslam added.

"Both countries will come to the table because the Trump administration knows very well that they cannot work alone in this world," he said.

The most traded copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 fell 1.1% to 75,210 yuan ($10,268.98) a ton.

"There are ongoing fears about how tariffs will impact China's economy," said Kyle Rodda, senior financial markets analyst at Capital.com.

LME zinc CMZN3 was the worst performer on Wednesday, falling 1.2% to $2,583.50 a ton after LME inventories surged by 70% to 190,550 tons.

LME aluminium CMAL3 rose 0.2% to $2,379 a ton and nickel CMNI3 gained 0.8% to $15,680 while lead CMPB3 fell 0.4% to $1,906 and tin CMSN3 was down 0.6% at $30,850.

($1 = 7.3240 Chinese yuan)