LONDON, Jan 2 (Reuters) - Copper prices hit 3-1/2 month lows
on Wednesday as worries about economic and demand growth in top
consumer China were reinforced by manufacturing data.
    Benchmark copper         on the London Metal Exchange ended
2.1 percent down at $5,842 a tonne, having touched its lowest
since Sept. 11 at $5,831. Prices of the metal used in power and
construction fell 18 percent last year.
    China's factory activity contracted for the first time in 19
months in December as domestic and export orders weakened
further, a private survey showed.             
    "Chinese manufacturing data confirmed the trend of a
slowdown and is weighing on metals," one copper trader said.
"Fund selling after Europe opened pushed copper to September
    CHINA: The Caixin/Markit Manufacturing Purchasing Managers'
Index (PMI) for December fell to 49.7 from 50.2 in November,
marking the first contraction since May 2017. Manufacturing is a
key source of jobs in China's economy. 
    China accounts for half of global copper consumption
estimated at about 24 million tonnes this year.
    TRADE: One major reason behind slowing growth is the
U.S.-China trade dispute. Last month the two countries agreed a
90-day ceasefire to try to end a dispute in which the two
nations have imposed increasingly severe tariffs on each others'
    POLICY: "While (China) authorities are loosening policy, we
only expect the economy to stabilise by mid-year, which will be
a factor weighing on all commodity prices but particularly the
industrial metals," Capital Economics said in a note.
    RUSAL: The LME confirmed on Monday that it would lift the
suspension on aluminium produced by Russia's Rusal           if
U.S. sanctions are lifted, saying that a consultation with users
had not raised any objections to the plan.             
    ALUMINIUM: The aluminium         price closed 2.7 percent
down at $1,797 a tonne after hitting a one-year low at $1,786 on
concern about oversupply despite Chinese producers' plans to cut
    SPREADS: Worries about a tight LME aluminium market because
of low stocks and one company holding 50-79 percent of warrants
has created a premium for the cash contract over the three-month
contract CMAL0-3 of about $9 a tonne. It touched $16 on
Monday, the highest level since July.
    STOCKS: The premium has attracted some aluminium to the LME
system but stocks, at 1.27 million tonnes, are still 10 percent
below those last April and a fraction of global demand estimated
at about 67 million tonnes this year. MALSTX-TOTAL
    PRICES: Zinc         fell 2.4 percent to $2,409, lead
        lost 3.3 percent to $1,955, tin         was little
changed at $19,480 and nickel         gained 1.7 percent to
$10,870 a tonne.