* GRAPHIC-2019 asset returns: (Updates with closing prices)By Eric OnstadLONDON, May 10 (Reuters) - Copper and other industrialmetals rebounded on Friday on hopes that a U.S.-China trade dealwould be hammered out, but they remained vulnerable to furtherfriction between the world's two biggest economies.
Negotiators in Washington agreed to stay at the table for asecond day on Friday even after the United States escalated atariff war with China by increasing levies and Beijingthreatened retaliation. "I was expecting to come in this morning to a sea of red,but I think there had been feelings that talks could have brokendown completely. That hasn't been the case and provided at leastsome reassurance," said Ross Strachan, senior commoditieseconomist at Capital Economics in London."The markets generally have been fairly sanguine about theprospects for a deal and that does leave some downside scope forthe metals to be hit by further nasty surprises in coming days."
Benchmark copper on the London Metal Exchange gained0.4% to $6,126 a tonne in closing open-outcry trading, butremained on track for a fourth straight weekly decline."The higher tariffs will have a significant negative effecton (Chinese) exports, against the backdrop of a slowingeconomy," said Michael Taylor, Moody's Investors Servicemanaging director and chief credit officer for Asia Pacific.Further policy easing by China will mitigate only some ofthe impact, he added.
* COPPER PREMIUM: The Yangshan copper premium for physicalmetal in China has increased for the thirdstraight session to $51.50 a tonne, up from a two-year low of$48.
* NICKEL SPREAD: The discount of LME cash nickel to thethree-month contract hit its lowest since mid-Januarythis week at $39.50 a tonne, showing tighter availability. Ithas fallen from $84 over the past three weeks and was last at$43.
* NICKEL STOCKS: LME nickel inventories fellto 169,578 tonnes, the lowest since April 2013, LME data showed.
* STEEL: China's construction rebar futures rose, givingfurther support to nickel, which is mainly used to makestainless steel.
* NICKEL PRICES: The LME three-month nickel price was the second best performer on the exchange on Friday, bid1.5% higher at $11,925 a tonne, untraded in closing rings.
* PRICES: LME aluminium closed 0.6% firmer at $1,808a tonne, zinc rose 0.8% to $2,630, lead slipped
0.7% to $1,822 and tin climbed 1.9% to end at $19,625.
* For the top stories in metals and other news, click or <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Mai Nguyen in Singapore; Editing byJan Harvey and Emelia Sithole-Matarise)