(Updates with closing prices)
By Eric Onstad
LONDON, Sept 11 (Reuters) - Nickel hit an eight-month low and zinc slipped to its lowest in three weeks on Tuesday as speculators added bearish positions against the backdrop of persistent international trade concerns and a slide in steel prices.
“The trade war theme is the overarching influence in the context of varying degrees of short positioning among the metals complex,” said analyst Nicholas Snowdon at Deutsche Bank in London.
Losses deepened in European afternoon trading as technical levels were hit, spurring further selling by speculators, traders said.
U.S. President Donald Trump warned last week that he was ready to levy additional tariffs on practically all Chinese imports, while China is prepared to ask the World Trade Organization next week for permission to impose sanctions on the United States.
Benchmark nickel on the London Metal Exchange closed down 1.5 percent at $12,230 a tonne after hitting $12,165, its weakest since Dec. 29 last year.
CTA (commodity trading advisers) funds unleashed more selling in the zinc market, Alastair Munro at broker Marex Spectron said in a note.
“Shorts are rebuilding, with the trend suggestive of the market testing ... that $2,283 low from mid-August.”
Three-month zinc dropped 2.9 percent to finish at$2,311 a tonne, its lowest level since Aug. 16.
* STEEL PRICES: Nickel, largely used to make stainless steel, and zinc, mainly used for galvanising steel, were also pressured by a slide in Chinese steel futures.
Steel shed more than 4 percent after a source involved with China’s output-cut plan said the environment ministry could allow northern provinces to set their own production curbs over winter.
* ZINC STOCKS: LME zinc inventories have climbed by 74 percent since the start of March to 229,675 tonnes. MZNSTX-TOTAL
* ALUMINIUM PRICE: Aluminium failed to build on its 1.3 percent rebound on Monday after a report that Russian producer Rusal could begin output cuts this month because of U.S. sanctions. LME prices fell 2.4 percent to end at$2,044 a tonne.
“I think we’re probably still some way off from Rusal actually cutting production, but it’s an indication of the scenario we could go back to as we saw in April,” Deutsche Bank’s Snowdon said.
* PRICES: Copper gave up early gains to close 0.9 percent weaker at $5,859 a tonne, lead dropped 3.1 percent to $1,965 a tonne after touching its lowest since Aug. 16 at $1,957.50, while tin dipped 0.2 percent to $19,045 a tonne.
* DOLLAR: The U.S. dollar rebounded from losses and was trading 0.1 percent firmer, making dollar-denominated assets such as commodities more expensive for buyers using other currencies.
Reporting by Eric Onstad Editing by David Goodman and David Evans