METALS-Lead rebounds from 4-1/2 month low on trade hopes

* Shanghai lead drops to lowest since April 2018

* GRAPHIC-2019 asset returns: (Updates with closing prices)

LONDON, Nov 26 (Reuters) - The price of lead bounced from four-month lows on Tuesday and other industrial metals also recovered on hopes that a U.S.-Sino trade deal was close to being agreed.

Earlier in the day base metals had largely ignored the upbeat mood on world equity markets, which were near their highest levels in almost two years due to optimism about the prospects of ending a trade war.

But metals prices jumped after U.S. President Donald Trump said in the European afternoon that the two sides were in the final throes of reaching a deal.

A trader said the White House comments sparked short covering after speculators had earlier extended bearish positions.

“We’re expecting the phase one deal to be signed, which is because both parties recognise the economic costs related to the tariffs that were to be implemented in December,” said analyst Carsten Menke at Julius Baer in Zurich.

Gains may be limited, however, he added. “Many metals markets are well supplied or more than well supplied, and this is what is limiting the upside.”

Benchmark three-month lead on the London Metal Exchange rose 0.4% to $1,943 a tonne in final open-outcry trading, reversing after touching $1,907.50, its weakest since July 9.

The metal is used mostly in batteries, and weaker global economic growth and a slump in car sales amid the prolonged trade dispute between the United States and China has dented demand.

The net speculative short position of lead on the LME had grown to 16.5% of open interest, the highest since early June, according to estimates by broker Marex Spectron.

* LEAD STOCKS: On-warrant lead inventories in LME-approved warehouses MPBSTX-TOTAL, or metal not earmarked for delivery, were last reported at 64,775 tonnes, up 49% so far this year.

Stockpiles in warehouses tracked by the Shanghai Futures Exchange PB-STX-SGH have more than doubled since end-September to 35,157 tonnes.

* SPREAD: The LME cash lead contract has been at discount over the three-month contract CMPB0-3 for nearly two weeks. This was last seen at $17.75 a tonne, the largest discount since April 30, suggesting plentiful nearby supplies.

* LEAD BALANCE: Refined lead will move into a global surplus of 55,000 tonnes next year, after being in a deficit of 46,000 tonnes in 2019, the International Lead and Zinc Study Group said in its latest report last month.

* ALUMINIUM TECHNICALS: LME aluminium is likely to see further losses, Commerzbank technical analyst Axel Rudolph said in a note.

“We still believe that an interim top was made at the current November high at $1,822 and (we) could see a drop to the October lows at $1,710/$1,705 unfold,” he said.

LME aluminium gained 1% to close at $1,753 a tonne.

* PRICES: LME copper climbed 1% to finish at $5,924 a tonne, nickel rose 0.7% to $14,595 and tin gave up 0.9% to $16,325.

Zinc advanced 0.8% to end at $2,299 a tonne after touching $2,265, the weakest since Oct. 18.

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($1 = 7.0389 Chinese yuan)

Additional reporting by Mai Nguyen in Singapore Editing by Alexandra Hudson, Jane Merriman and Jan Harvey