(Updates with closing prices)By Peter HobsonLONDON, Nov 16 (Reuters) - Copper rose on Friday as signs ofsupply tightness supported prices, but worries about the outcomeof the U.S.-China trade dispute limited gains.
Supply shortages also powered zinc towards its biggestweekly gain since September.
Benchmark copper on the London Metal Exchange closedup 0.3 percent at $6,205 a tonne, 2.4 percent higher this week.Prices rallied after news that Chinese smelter JiangxiCopper and miner Antofagasta had agreedlower treatment and refining charges for 2019, said ING analystWarren Patterson. "This is showing that either there is a tightening inconcentrate supply or too much spare smelting capacity in China.I think it's a mixture of the two," he said.
China is the world's biggest consumer of metals.Metals received a further boost when the U.S. dollarweakened after Federal Reserve officials appeared to questionthe pace of interest rate rises and from strong U.S.manufacturing data. A weaker dollar makes metals cheaper for buyers who holdother currencies.
But while supply-demand fundamentals were good for copper,uncertainty about U.S.-China trade talks -- which has helpedpush metals prices sharply lower since the summer -- were stillweighing on prices, Patterson said.
COPPER STOCKS: Headline copper inventories in LME-registeredwarehouses fell by 5,425 tonnes to 161,025tonnes, nearing last month's 10-year low of 136,675 tonnes.
SPREAD: Another signal of tight supply is the premium ofcash copper over the three-month contract , which hasdrifted from a near four-year high of $47 last month to $18.50but is still far above recent norms.TECHNICALS: Copper was holding above its technicallyimportant 50-day and 100-day moving averages around$6,160-$6,165.
U.S.-CHINA TRADE TALKS: A senior White House official toldReuters a written response sent this week by China to U.S.demands for trade reforms was unlikely to trigger a breakthroughat talks. ZINC: Benchmark LME zinc closed 1.2 percent higherat $2,607 a tonne, up 3.5 percent this week, with stockpiles inthe LME's warehouse system falling to a 10-1/2-year low of125,400 tonnes. SPREAD: The premium of cash zinc over three-month metal has surged to $78.75, the highest since October lastyear, from a discount of more than $20 two months ago,suggesting a shortage of available material.
OTHER METALS: LME aluminium finished up 0.6 percentat $1,940 a tonne, nickel ended 0.9 percent higher at$11,360, lead gained 3.6 percent to $1,998 and tin closed down 0.2 percent at $19,350.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Mai NguyenEditing by Edmund Blair, Dale Hudson and Kirsten Donovan)