* GRAPHIC-2019 asset returns: (Updates with closing prices) By Eric Onstad LONDON, Dec 17 (Reuters) - Copper touched a new seven-monthpeak on Tuesday as investors began looking beyond the U.S.-Chinatrade deal to potential shortages next year due to productionproblems. Three-month copper on the London Metal Exchange (LME) climbed to an intraday high of $6,223 a tonne, thestrongest since May 8, before retreating to $6,200 in finalopen-outcry trading, up $1 from Monday's close. The so-called Phase One trade deal between Washington andBeijing has been "absolutely completed", a top White Houseadviser said on Monday. Kieran Clancy, assistant commodities economist at CapitalEconomics, said "the obvious catalyst" for the climb in thecopper price was news about the trade deal. "But really in the background I think that probably reflectsin some part that copper's actual fundamentals should be quitebullish for prices," he said. "We've had major mine outages, both planned and unplanned,which have been weighing very heavily on smelter output. We'revery much caught between two stories and I think the fundamentalstory is the one that's trying to break out now." Capital Economics expects the LME copper price to rise to$6,400 a tonne by the end of 2020, he added.
Helen Lau of Argonaut Securities was also positive aboutcopper. "We see lots of signs of recovery in China's domesticeconomy... and the Chinese government said 2020 fiscal supportwill be more effective," she said.
* CHINA COPPER: China's refined copper output rose 19.6%year-on-year to a record monthly high of 909,000 tonnes inNovember, data showed on Tuesday.* COPPER SPREAD: The discount of LME cash copper over thethree-month contract tightened to $6 a tonne, a levelnot seen in seven and a half months, suggesting nearby suppliesare tightening.
Inventories in warehouses approved by the LME dropped to162,225 tonnes, the lowest since March 13.* LEAD/ZINC BALANCES: The global zinc market flipped to asurplus of 7,300 tonnes in October, while the global lead marketdeficit contracted to 2,400 tonnes, data showed. * NICKEL BALANCE: The global nickel market deficit widenedslightly to 1,300 tonnes in October, data showed.* TIN TECHNICALS: "LME tin ... has now risen above theOctober high at $17,240 and thus still targets the early Julylow and the September high at $17,585/$17,775," Commerzbanktechnical analyst Axel Rudolph said in a note.
He said the market might reach targets of $18,585 and$18,685 which is where prices fell to in May and June. * PRICES: LME aluminium shed 0.8% in closing ringsto $1,764 a tonne, while nickel dropped 1.7% to $13,960,reversing after touching $14,290, its highest since Nov. 28.
Zinc shed 0.4% to finish at $2,281 a tonne, lead edged up 0.03% to $1,888 and tin gained 0.9% to$17,325. * For the top stories in metals and other news, click or (Additional reporting by Mai Nguyen in Singapore; Editing byJane Merriman and David Evans)
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