* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl
* Lead prices touch $2,126/T, highest since March
* Premium for cash to 3-month nickel hits highest since 2009 (Updates prices)
By Pratima Desai
LONDON, Sept 23 (Reuters) - Copper prices fell to their lowest in two and a half weeks on Monday as weak demand prospects were reinforced by the latest round of U.S.-China talks which failed to yield signs of a breakthrough in the long-running trade row.
Benchmark copper on the London Metal Exchange was untraded in official rings, but bid down 1.3% at $5,725 a tonne at 0936 GMT. Prices of the metal used by investors as a gauge of economic health fell to $5,718 a tonne earlier in the session, the lowest since Sept. 4.
“You can’t predict the twists and turns in this trade war or the tweets that are driving this market,” said Guy Wolf, head of market analytics at Marex Spectron.
“Underlying physical demand is not that bad, but we’re in an environment where people are using a “just-in-time” inventory cycle, so they won’t be caught out if things get worse.”
TRADE: A U.S.-China trade deal appeared elusive on Friday after Chinese officials unexpectedly cancelled a visit to farms in Montana and Nebraska, as deputy trade negotiators wrapped up two days of negotiations in Washington.
However, Washington and Beijing labelled the talks last week as “productive” and “constructive”, with the U.S. Trade Representative’s office saying high-level negotiations will take place in October, as previously planned.
CHINA: China is the world’s largest consumer of base metals, demand for which is highly correlated with industrial activity. That’s why the market is already looking ahead to surveys of purchasing managers in the manufacturing sector towards the end of September.
Chinese data for August shows the country’s economy is “still sliding across the board”, brokerage Jinrui Futures said in a note, adding that growth in real estate investment had fallen for four months in a row.
NICKEL: The premium for the cash over the three-month contract MNI0-3 soared to $208 a tonne, the highest since April 2009 on concern about nearby supplies on the LME market. It was last at $195 a tonne.
These worries are due to two companies holding large amounts of nickel warrants <0#LME-WHL>, historically low stocks below 160,000 tonnes and cancelled warrants - metal earmarked for delivery - at 55% of the total MNISTX-TOTAL.
Three-month nickel was up 0.8% at $17,600 a tonne.
LEAD: Prices hit $2,126 a tonne, the highest in more than six months as the market factored in the potential for larger deficits going into the winter, peak demand season from the auto battery sector.
It was last down 1% at $2,099 a tonne.
PRICES: Aluminium slipped 0.9% to $1,778, zinc fell 0.6% to $2,290 and tin ceded 0.9% to $16,550 a tonne. (Reporting by Pratima Desai; Additional reporting by Tom Daly; Editing by Mark Potter and Louise Heavens)