(Updates with closing prices)By Peter HobsonLONDON, Oct 17 (Reuters) - Copper prices held steady onWednesday as better than forecast Chinese lending datasignalling solid economic growth in the world's biggest metalsconsumer was offset by signs that a supply squeeze in China wasreceding.Aluminium meanwhile fell after a second day of large inflowsof metal into London Metal Exchange warehouses.
"For copper, on the macro side, the (Chinese) data wasslightly better than expected, so that's a positive," saidDeutsche Bank analyst Nick Snowdon. "But on the physical side (there are) slightly softersignals in terms of Chinese import demand in the near term," hesaid.
COPPER: Benchmark copper on the London Metal Exchange (LME) closed down 0.1 percent at $6,219 a tonne.
RANGE-BOUND: Copper has been locked between around $6,100and $6,350 since late September. Fears that a U.S.-China tradedispute would weaken demand helped push prices to a 14-month lowof $5,773 in August.SPREAD: Cash copper on the LME, which earlier this month wastrading at the largest premium over the three-month contractsince June 2016 , is now trading at a discount of $3,signalling a slackening of demand for nearby metal.
Analysts said that reflected a lessening of need for metalin China after a recent shortage.
Yangshan copper import premiums have alsodipped from 3-year highs. China's copper imports surged inSeptember, which may have satisfied immediate demand, Deutsche'sSnowdon said. ALUMINIUM: LME aluminium ended down 0.6 percent at$2,022 a tonne after headline stocks in LME-registeredwarehouses surged from 926,100 tonnes to 1,082,600 tonnes in twodays. The inflows did not reflect a change in supply-demandfundamentals, said a person at a metals-trading bank in London."This is a shuffle between on- and off-warrant stocks," he said.SMELTER SHUTDOWNS: Aluminium prices barely moved after Alcoasaid on Wednesday it would close two aluminium plants in Spainwith combined annual production of 180,000 tonnes. CHINA DATA: Chinese banks extended 1.38 trillion yuan($199.25 billion) in net new yuan loans in September, more thananalysts had expected and up from the previous month. CHINA STIMULUS: China has stepped up economic stimulus inrecent months to counter any negative effect from a tradedispute with the United States.
In the latest steps, its central bank is increasinglyexpected to cut bank reserve requirements next year and itsstate planner approved a high-speed railway project worth 36.8billion yuan ($5.3 billion).OTHER METALS: LME zinc finished up 2.3 percent at$2,665 a tonne, nickel closed down 1.8 percent at$12,375, lead slid 0.9 percent to $2,047 and tin ended down 0.7 percent at $19,075.
(Additional reporting by Muyu Xu and Dominique Patton; Editingby Elaine Hardcastle and David Evans)