* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl
* Aluminium stocks in China slide (Updates with closing prices)
By Pratima Desai
LONDON, Dec 19 (Reuters) - Copper prices hovered near seven-month highs on Thursday, buoyed by optimism about Chinese growth and demand, and progress in the prolonged trade dispute between the United States and China.
Benchmark copper on the London Metal Exchange ended up 0.7% at $6,215 a tonne, a gain of more than 12% from the two-year low of $5,518 hit in September. Prices of the metal, seen as a gauge of economic health by investors, hit $6,223 a tonne earlier this week, the highest since May 8.
"Some pretty solid data from China illustrates the improving outlook and people are more hopeful about the trade situation," a metals industry source said. "It's not a completely risk-on environment, but things do seem to be improving."
TRADE: China and the United States are in touch over the signing of their Phase 1 trade deal, China's commerce ministry said, which will see lower U.S. tariffs on Chinese goods and higher Chinese purchases of U.S. farm, energy and manufactured goods.
China on Thursday unveiled a new list of import tariff exemptions for six chemical and oil products from the United States, days after the world's two largest economies announced a Phase 1 trade deal.
DATA: China's industrial production rose 6.2% year-on-year in November, the fastest in five months, beating the consensus of 5.0% and rising from 4.7% in October.
Manufacturing in top consumer China and globally is highly correlated with demand for industrial metals.
CONSTRUCTION: "Chinese commodity demand strengthened notably in November, driven by solid construction activities as evident in the steady draws of domestic steel, copper and aluminium inventories," Citi analysts said in a note.
"Overall economic activities are accelerating recently, earlier than usual due to an earlier Chinese New Year in 2020. A slightly warmer winter also supports construction."
BAROMETER: Aluminium touched $1,800 a tonne on the LME, the highest since Nov. 11. It closed up 1.1% at $1,797.
Traders say aluminium is another barometer of global economic health. But they also say the LME contract is, to some extent, following the Shanghai Futures Exchange where aluminium hit its highest in more than three months due to falling stocks.
Aluminium stocks in warehouses monitored by ShFE AL-STX-SGH dropped to 218,367 tonnes, their lowest since March 2017.
"Looking ahead, heavy snow in northern areas (in China) has led to some logistical issues, which could see a further fall in ShFE stock levels," analysts at ING said in a note.
PRICES: Zinc was up 1.0% at $2,325, lead fell 0.4% to $1,919, tin gained 0.5% to $17,375 and nickel gained 2.2% to $14,170 a tonne. (Reporting by Pratima Desai; Editing by David Evans/Jan Harvey/Jane Merriman)