January 10, 2018 / 11:04 AM / a year ago

METALS-Weaker dollar drives nickel to 2-1/2 year high

(Recasts, updates with official prices)

By Peter Hobson

LONDON, Jan 10 (Reuters) - Nickel rose to its highest since 2015 on Wednesday and other industrial metals gained after the dollar weakened by the most in a month, making metals cheaper for users of other currencies.

A World Bank forecast of solid global economic growth also boosted metals, while investors shrugged off weak inflation data from China, the world's biggest metals consumer.

"Demand outside China is still strong," said ABN AMRO analyst Casper Burgering, predicting that metals would continue to gain in the first quarter of 2018 after copper, aluminium, nickel and zinc rose by around 30 percent last year.

NICKEL: Benchmark nickel on the London Metal Exchange traded up 1.9 percent at $12,940 a tonne in official rings after touching $13,200, the highest since June 2015.

TECHNICALS: Nickel burst above a long-term downtrend line from 2011 and resistance at $13,000, triggering technical buying, traders said. Prices would likely move higher if they held above $13,000, said Societe Generale analyst Robin Bhar.

DOLLAR: The dollar fell against a basket of currencies after a report that China was ready to slow or halt its U.S. treasury purchases.

GLOBAL GROWTH: The global economy is set to expand by 3.1 percent in 2018, slightly up from 3 percent last year, the World Bank said.

CHINA ECONOMY: Chinese producer prices rose at their slowest pace in 13 months in December as a battle against winter smog dented factory demand for raw materials.

CHINA AUTO DEMAND: Automakers in China, the world's largest car market, face their weakest year of sales growth in at least two decades as tax cuts on smaller engine cars are phased out, potentially reducing demand for metals.

ALUMINIUM: U.S. aluminium products makers sought new trade protections against Chinese imports, accusing China Zhongwang Holdings Ltd and its affiliates of evading duties by shipping aluminium products through Vietnam.

ZINC: LME zinc traded up 0.7 percent at $3,357 a tonne after concerns over supplies and falling inventories drove it on Tuesday to $3,400, its highest in more than a decade.

ZINC STOCKS: On-warrant stocks available to the market at LME-registered warehouses fell to 129,300 tonnes after 9,950 tonnes of cancellations, supporting prices. MZNSTX-TOTAL

LEAD PREMIUM: The shortest time spread on lead, tom/next CMCUT-0, which represents the premium to roll over a position for a day, soared to a high of $10 a tonne from $1.50 a day earlier.

LEAD WARRANTS: One entity was holding between 50 and 80 percent of LME warrants, fuelling concerns over supply. <0#LME-WHC> LME Lead traded up 1.2 percent at $2,575 a tonne.

OTHER METALS: Copper traded 1.2 percent higher at $7,184, aluminium gained 0.9 percent to $2,172.50, and tin traded up 0.4 percent at $20,030.

Additional reporting by Melanie Burton; editing by Alexander Smith and Elaine Hardcastle

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