* GRAPHIC-2019 asset returns:
* Discount for cash against 3-month aluminium narrows (Updates with official prices, U.S. data and nickel)By Pratima DesaiLONDON, July 1 (Reuters) - Copper prices hit six-week highson Monday as sentiment turned positive after the United Statesand China agreed a trade truce, but weak manufacturing datareinforced expectations of slowing economic activity and demand.Benchmark copper on the London Metal Exchange endeddown 0.6% at $5,955 a tonne. Prices of the metal, used widely inpower and construction industries, earlier touched $6,075, thehighest since May 20."We now have a ceasefire in the trade war. There is reasonto be optimistic about a positive impact on global manufacturingand metals demand," said Danske Bank analyst Jens Pederson. "Butwe have had some quite downbeat economic data, PMIs have fallenjust about everywhere."
TRADE: The United States and China agreed on Saturday torestart trade talks after President Donald Trump offeredconcessions including no new tariffs and an easing ofrestrictions on technology company Huawei. But no deadline was set for progress on a deal, and theworld's two largest economies remain at odds over significantparts of an agreement.
"Existing tariffs will remain in place for the length of thetalks and given how unpredictable the trade war has been so far,it is very unlikely that such a truce will give much confidenceto firms," analysts at NAB said in a note."As such, it is likely that the softening in globalmanufacturing conditions continues until a fuller agreement isfleshed out."PMIS: China's factory activity unexpectedly shrank in Juneas domestic and export demand faltered, a private sectorbusiness survey showed on Monday, pointing to further strains onits vast manufacturing sector. Manufacturing activity also shrank in most Asian andEuropean countries in June. Growth in U.S. manufacturing activity slowed to its lowestlevel in more than a 2-1/2 years in June, with a measure of neworders received by factories tumbling, according to theInstitute for Supply Management (ISM). TECHNICALS: Upside resistance for copper comes in at$6,080-$6,090, near the 50-day moving average.ALUMINIUM: Aluminium stocks at 989,125, a drop of 22% sinceearly May, and one company holding large amounts of warrants --between 40% and 49% -- is fuelling concern about nearby supplieson the LME market.Worries are reinforced by cancelled warrants -- metalearmarked for delivery -- at 35% of total stocks.This can be seen in the narrowing discount for the cash overthe three-month contract, which closed at $20 a tonne on Friday from levels near $31 on June 14.Three-month aluminium slipped 0.3% to $1,794 atonne. Last month it touched a 2-1/2 year low of $1,745.PRICES: Zinc closed down 1.3% at $2,462, lead fell 1.3% to $1,906, tin rose 0.4% to $18,900and nickel was down 2.7% at $12,350 a tonne.NICKEL: Traders said nickel's large losses on Monday weredue to profit-taking after large gains this year and a break ofthe 100-day moving average around $12,540.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS Base metals' year-to-date performance on the LME ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Pratima Desai; Editing by Jane Merriman and MarkPotter)