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METALS-Base metals rise as dollar rally ebbs, trade fears cap upside

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(Adds closing prices) By Maytaal Angel LONDON, Sept 12 (Reuters) - Base metals recovered on Wednesday, with nickel moving off an 8-1/2 month low as a dollar rally ran out of steam, but gains were capped by fresh sparring between Washington and Beijing over trade and by sinking steel prices in China. U.S. President Donald Trump said on Tuesday the United States was taking a tough stance with China. That cemented expectations that fresh levies on Chinese exports will soon be announced. Still, the dollar, which has benefited from heightened trade tensions, slipped versus a basket of currencies, making dollar-priced metals cheaper for non-U.S. investors. "The weaker dollar gives an opportunity to buy. Metals are oversold on these trade concerns," said SP Angel analyst John
Meyer.


"Trump may have one last swing with the tariff axe but he's likely to back off as he did with the EU, to settle with something that is far more akin to free trade than what the market fears." In China, steel prices tumbled for a second day as Beijing mulls allowing its northern provinces to decide individual output cuts by heavy industry - a move that could lead to oversupply. Nickel and zinc are key steelmaking raw materials.



* PRICES: Three-month nickel on the London Metal Exchange closed up 3.9 percent at $12,620 a tonne, having hit its lowest since late December at $12,085, while bellwether copper ended up 2.4 percent at $5,997 a tonne, having hit its highest in more than a week.


Zinc , used to galvanise steel, climbed 2.6 percent to $2,370.50, having hit its lowest since mid-August on Tuesday, while aluminium ended up 1 percent at $2,064 a tonne, having hit its weakest since mid-August.
* ALUMINIUM TECHNICALS: Three-month aluminium traded at a discount of $39 a tonne to the three-month price as the market continues to discount the possibility that supplies from Russia's Rusal will be unavailable due to U.S. sanctions. For a column on aluminium click:
* NORILSK: Norilsk Nickel analyst Alex Khodov said the global nickel deficit would be 90,000 tonnes in the first eight months of 2018 and reach 120,000 tonnes by the year-end.
* CONGO: Democratic Republic of Congo's mines minister said a new mining code signed into law in March that hikes royalties and taxes cannot be called into question. Congo is Africa's top copper producer.
* OTHER METALS: Lead closed up 2.8 percent at $2,020 a tonne while tin ended flat at $19,050.



<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Tom Daly; Editing by Kirsten Donovan and David Evans)

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