(Updates with closing prices, recasts)By Peter HobsonLONDON, Oct 23 (Reuters) - Copper prices rose on Wednesdayas a wave of protests in top producer Chile began to disruptsupplies, but gains were limited by lingering fears over thehealth of the global economy and the outlook for demand.Benchmark copper on the London Metal Exchange endedup 1.1% at $5,881 a tonne after reaching $5,885, the highestsince Sept. 16.
However, the metal used in power and construction remainednear last month's two-year low of $5,518. "Weak demand is theoverriding story," said ING analyst Wenyu Yao.
CHILE COPPER DISRUPTION: Antofagasta warned thatunrest could lower its output by about 5,000 tonnes, equivalentto less than 3% of third-quarter production. Codelco, the world's biggest producer, said one of its mineswas shut and operations at a smelter drastically reduced. Unionworkers at BHP's Escondida copper mine downed tools onTuesday. FUNDAMENTALS: The International Copper Study Group said themarket would return to a surplus of 281,000 tonnes in 2020 aftera 320,000 tonne shortfall this year. FREEPORT: Miner Freeport McMoRan said its copperoutput fell 14% in the third quarter. ZINC: LME zinc finished up 0.1% at $2,469 a tonne,around the highest since July and up from a three-year low of$2,190 on Sept. 3.ZINC WARRANTS/SPREAD: On-warrant inventories inLME-registered warehouses fell to 35,125 tonnes, the lowestsince at least 1998, and cash zinc traded at a $36 premium tothree-month metal, up from around zero over July-September,suggesting lower availability of nearby material.POSITIONING: Speculative positioning in LME zinc was largelyflat after a bout of short covering, brokers Marex Spectronsaid.
FUNDAMENTALS: The global zinc market saw a 106,000-tonneshortfall over January-July, the International Lead and ZincStudy Group said this month. NICKEL: LME nickel closed 0.6% higher at $16,590 atonne, with the premium for cash metal versus the three-monthcontract tumbling to $30 from more than $200 at the start ofOctober, suggesting shortages of nearby material have eased.LME PROBE: The LME has asked members to report any unusualactivity in nickel trading after prices lurched up and down inthe wake of large transactions last week, sources said. ALUMINIUM: Miner Rio Tinto flagged a possiblepullback or closure of New Zealand's Aluminium Smelter, citingweakness in the aluminium market and high energy costs. Tajikistan cut its aluminium output growth target for thisyear to 5% from 20%, a government source said. Producer Norsk Hydro said it expected globalaluminium demand growth to hover around zero this year, downfrom 3.1% in 2018. OTHER METALS: LME aluminium ended up 0.6% at $1,730a tonne, lead rose 0.3% to $2,224 and tin fell1.8% to $16,550.
(Reporting by Peter HobsonAdditional reporting by Mai NguyenEditing by Dale Hudson and David Holmes)