METALS-Copper bounces on weak dollar, Chinese data and Chile rowback

By Eric Onstad

LONDON, Jan 19 (Reuters) - Copper prices rebounded on Monday on a weaker dollar, and after economic data in top metals consumer China came in stronger than expected and top producer Chile trimmed output forecasts.

Benchmark three-month copper on the London Metal Exchange CMCU3 was up 1.3% at $12,969 a metric ton at 1700 GMT after two straight sessions of declines.

LME copper had touched a one-week low on Friday on profit-taking and concerns about weak Chinese demand, having pulled back from a record peak of $13,407 hit on Wednesday.

It has surged 31% over the past six months, partly on worries that mine disruptions will cause shortages this year.

"Today's copper rebound is largely macro- and dollar-driven after Trump's tariff threats against several European countries weakened the U.S. dollar and triggered broad metals buying," said Ewa Manthey, commodities strategist at ING.

"The move was reinforced by Chinese GDP meeting the government's target, which helped stabilise demand sentiment."

The dollar index =USD fell after U.S. President Donald Trump said he would impose an additional 10% import tariff from February 1 on goods from eight European nations until the U.S. is allowed to buy Greenland. FRX/

A weaker dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies.

Investors were encouraged by data showing China's industrial output rose 5.2% in December from a year earlier, faster than in November and higher than expected.

Also, economic growth in the world's second-largest economy in the fourth quarter was slightly better than forecasts.

Supporting copper too was news that top producer Chile cut short-term production forecasts, while No. 3 producer Peru's output was down 11% in November.

The most-active copper contract on the Shanghai Futures Exchange SCFcv1 closed daytime trading down 0.7% at 101,180 yuan ($14,532) a ton as investors there continued to book profits.

They were also concerned about weak demand at elevated prices as copper inventories in warehouses monitored by SHFE continued to rise for a sixth consecutive week.

Deliverable copper inventories CU-STX-SGH climbed 18.3% to 213,515 tons on Friday, a nine-month high.

Among other metals, LME aluminium CMAL3 rose 0.9% to $3,162.50 a ton, zinc CMZN3 added 0.6% to $3,228, lead CMPB3 gained 0.9% to $2,061.50, nickel CMNI3 jumped 3.2% to $18,135 while tin CMSN3 advanced 3.2% to $49,535.

($1 = 6.9628 Chinese yuan renminbi)