* Copper resistance at 100-week moving average of $6,245 * LME copper stocks at lowest since March 2018 (Updates with closing prices) By Pratima Desai LONDON, Jan 2 (Reuters) - Copper prices rose towardseight-month highs on Thursday as demand expectations wereboosted by economic measures in China and optimism that theworld's top metals consumer would also sign a preliminary tradedeal with the United States. Benchmark copper on the London Metal Exchange (LME) closed0.2% up at $6,188 a tonne. The metal used widely in the powerand construction industries earlier touched $6,233, close to the$6,266.50 eight-month peak hit last week. "It's not a boom, but the de-escalation of trade tensions,the gradual recovery in manufacturing and Chinese monetarypolicy loosening mean a benign environment for base metals,"said Danske Bank analyst Jens Pederson. POLICY: The People's Bank of China (PBoC) cut the amount ofcash that banks must hold as reserves, releasing about 800billion yuan ($114.91 billion) in funds to shore up the slowingeconomy. "With the background of a trade war - even if a Phase 1 dealis signed - and an emerging technology war, China's corporatesneed more financing support," ING analysts said in a note,adding that the central bank could cut the reserve requirementratio by a further 0.5 percentage points in the second quarter. TRADE: U.S. President Donald Trump this week said that Phase1 of a trade deal with China would be signed at the White Houseon Jan. 15, though considerable confusion remains over detailsof the agreement. MANUFACTURING: Chinese factory activity expanded at a slowerpace in December, pulling back from a three-year high inNovember as new orders softened, a survey showed. However, production grew at a solid rate and businessconfidence jumped on the thawing trade tensions, offering somesupport for the cooling economy.
"Looking ahead, we think that exports will continue tobenefit from recovering global demand and, at the margin, U.S.tariffs rollbacks. But domestic demand will probably coolfurther," Capital Economics analysts said in a note. TECHNICALS: Copper faces stiff resistance at $6,245, wherethe 100-week moving average currently sits, while support comesin at the 21-day moving average of $6,110. STOCKS: Supporting copper prices are falling stocks in LME-registered warehouses. At 144,675 tonnes,stocks are less than half the levels of August last year and attheir lowest since March. Copper inventories in warehouses monitored by the ShanghaiFutures Exchange - at about 124,000 tonnes - havemore than halved since March.
PRICES: Aluminium was down 0.3% at $1,804.5 a tonne,zinc rose 1.7% to $2,310, lead eased 0.4% to$1,919, tin was flat at $17,175 and nickel gained 1.7% to $14,260. (Reporting by Pratima DesaiEditing by David Goodman)
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