METALS-Copper hits multi-month peaks on improved China sentiment, US tariffs

(Updates prices at 1730 GMT) By Eric Onstad LONDON, March 12 (Reuters) - Copper prices touched multi-month highs on Wednesday as traders prepared for potential U.S. tariffs, while investor sentiment got a boost from signs of improving demand in China and a possible ceasefire in Ukraine. Three-month copper on the London Metal Exchange (LME) CMCU3 was up 1.3% at $9,785 a metric ton by 1730 GMT. It briefly touched $9,800, its strongest since October 11. U.S. Comex copper futures HGc3 advanced 2% to $4.86 a lb. after hitting $4.90, its highest since May last year. U.S. tariffs of 25% on steel and aluminum products took effect on Wednesday while U.S. President Donald Trump has also ordered a probe into possible new tariffs on copper, which has spurred U.S. players to stock up. The U.S. commerce secretary confirmed on Wednesday that Trump would add copper to his trade protections. "There's a lot of copper being shipped to the U.S., depleting the inventory levels elsewhere and underpinning prices outside of the U.S.," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. The premium of Comex copper over LME rose to $925 a ton from $845 a day earlier. "Underlying sentiment has most certainly improved in the last 48 hours, not only because of the possible ceasefire, but also what happened yesterday with U.S.-Canada relations," Hansen added. European stock markets rose on Wednesday after Ukraine agreed to accept a U.S. ceasefire proposal while Trump on Tuesday backed off from doubling metals tariffs after Canada's Ontario province suspended a move to impose surcharges on electricity exports to the U.S. MKTS/GLOB In top metals consumer China, copper on the Shanghai Futures Exchange SCFcv1 closed daytime trade 2.08% higher on prospects of improving demand, having earlier hit its highest since September 30. "Manufacturers, supported by recent stimulus measures, are ramping up production... copper cathode inventories in Shanghai and Guangdong extended declines from a peak due to fewer imports in recent months," ANZ analysts said in a note. LME zinc CMZN3 rose as much as 2.2% to its highest in nearly three months after Nyrstar said it will cut production by 25% at its Hobart zinc operations in Australia from April. It later pared gains to $2,936 a ton, a rise of 0.8%. Among other metals, LME aluminium CMAL3 edged up 0.1% to $2,705.50 a ton, nickel CMNI3 advanced 1.2% to $16,685, lead CMPB3 climbed 1.5% to $2,082 and tin CMSN3 added 0.7% to $33,390. ($1 = 7.2441 Chinese yuan) (Reporting by Eric Onstad, additional reporting by Amy Lv and Lewis Jackson in Beijing; Editing by Leroy Leo, Shailesh Kuber and Tasim Zahid) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net))