* GRAPHIC-2019 asset returns: (Updates with closing prices, rare earths update)By Zandi ShabalalaLONDON, June 4 (Reuters) - Copper prices hovered near afive-month low on Tuesday as an escalation of the U.S.-Chinatrade war reinforced concern about demand for industrial metalswhile the weaker dollar provided some suppport.China on Tuesday warned that its companies operating in theUnited States could face harassment from U.S. law enforcementagencies. It also rebuffed U.S. criticism of a trade white paper as"singing the same old tune"."There are fears that the U.S-China trade war will dampenthe global economy and that it might fall into recession," saidCommerzbank analyst Daniel Briesemann."These macro factors are in play even if fundamentals may bepointing to higher prices."
Benchmark copper on the London Metal Exchange (LME)ended 0.8% higher at $5,878 a tonne but was still close to theJan. 4 low of $5,801 touched on Monday.
TRADE WAR: China will consider strengthening controls onexports of rare earths - 17 chemical elements used in high-techconsumer electronics and military equipment - to protect andbetter use such a "strategic resource", the state planner saidon Tuesday. The world's second-largest economy is the biggest exporterof the elements and moves to limit exports would raise tensionswith the United States, where China is the dominant supplier.DEMAND: China accounts for nearly half of global copperconsumption estimated at 24 million tonnes. The United Statesaccounts for about 8 percent.
DOLLAR: Expectations that the U.S. Federal Reserve will sooncut interest rates weighed on the U.S. currency, a weakening ofwhich makes dollar-denominated commodities cheaper for holdersof other currencies, potentially boosting demand. INVENTORIES: Copper stocks in LME-registered warehouses fell slightly to 211,775 tones but have jumped by67% so far this year. That increase has led to a widening of thediscount for cash copper against the three-month contract to $26a tonne. SPREADS: The tightness in the LME market has kept cash zincat a premium of about $140 over the three-month contract. ZINC INVENTORIES: Zinc stocks registered with SfHE rose 5.4%to 59,351 tonnes, according to a weekly tally on Friday. But inventories are still down 54% from a 2019 high of124,038 tonnes in March.Stocks in LME-monitored warehouses sit at 100,375 tonnes,and are down about 22% so far this year. PRICES: Zinc touched a January low of $2,448 a tonnebefore closing 0.3% up at $2,475.50. Aluminium finished0.5% up at $1,786, lead jumped 2% to $1,846 and tin slipped 0.3% to $19,090.Nickel was down 0.5% in electronic trading to standat $11,815 a tonne at 1600 GMT.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Mai NguyenEditing by Susan Fenton and David Goodman)