* Glencore cuts 2019 copper forecast
* Declining LME copper stocks support price
* GRAPHIC-2019 asset returns: (Adds closing prices)By Zandi ShabalalaLONDON, Feb 21 (Reuters) - Copper prices slipped fromseven-month highs on Thursday as the dollar firmed and investorscashed in gains from a rally in the previous session fuelled byfalling inventories.
The dollar found strength in minutes from a U.S FederalReserve meeting that raised expectations of a possible U.S.interest rate increase this year. Three-month copper on the London Metal Exchange ended 0.4 percent lower at $6,379 a tonne, having hit itshighest since July 10 at $6,426.50 in the previous session.On Wednesday LME copper broke through technical resistanceat $6,400, which triggered profit-taking alongside a strongerdollar, said Saxo Bank commodities analyst Ole Hansen."But overall the story driving copper is the worries aboutsupply," he said.Miner and trader Glencore lowered its 2019 copper outputforecast to 1.5 million tonnes from 1.54 million tonnes, citingproduction cuts at its Mutanda mine in the Democratic Republicof Congo. "(That) supports the idea that supply is tightening incopper and has helped it move ahead despite the headwinds fromthe uncertainty related to global economic growth," Hansen said.The metal used in power and construction has registeredreduced inventories while supply has been constrained by lack ofinvestment in mines and declining grades.
STOCKS: Stocks of copper in LME warehouses stand at 137,700tonnes, close to 10-year lows of 122,500 tonnes hit in earlyDecember last year. DOLLAR: The U.S. currency gained against a basket ofmajor currencies. A stronger greenback makes dollar-denominatedcommodities more expensive for non-U.S. firms in a relationshipused by funds to generate buy and sell signals. TRADE TALKS: The United States and China have started tooutline commitments in principle on the stickiest issues intheir trade dispute, the most significant progress yet towardending a seven-month trade war, sources said. Signs of progress in trade talks usually boost metals andequities, but markets had been "brewing on that theme for toolong and most of the positive news has been priced in already",said Saxo Bank's Hansen.TIGHT ZINC: The premium for cash zinc over the three-monthLME contract rose to $26.50 as stocks in LME warehouses fell totheir lowest since 2017 at 83,250 tonnes.ALUMINIUM: Global primary aluminium output fell to 5.304million tonnes in January from revised 5.498 million tonnes inDecember, data from the International Aluminium Instituteshowed, with the bulk of this coming from winter production cutsin China. Aluminium rose 2 percent to $1,905 per tonne.
PRICES: Zinc fell 0.6 percent to $2,683, lead added 1.2 percent at $2,066, tin gained 0.8percent at $21,425 and nickel fell 0.4 percent at$12,850.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS GRAPHIC-2019 asset returns: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Tom Daly in BEIJINGEditing by Jan Harvey, David Goodman and Toby Chopra)
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