LONDON- Copper eased on Monday as a survey showed growth in China's services sector slowing while an escalation in tensions between the United States and Iran sapped demand for cyclical assets such as base metals.

But base metals were relatively resilient due to a sharp rise in oil prices, Commerzbank analyst Daniel Briesemann said, which would lift input costs for miners.

"Base metals have held up well but they will come under some pressure because of risk aversion," he said.

Benchmark copper CMCU3 on the London Metal Exchange (LME)had slipped 0.2% to $6,114.50 a tonne by 1220 GMT, but was still close to an eight-month high.

Iran warned it would retaliate against the United States after the killing of military commander Qassem Soleimani last week, sparking a wave of derisking in stocks and metals while gold, bonds and the yen jumped.

The downbeat reading of China's services sector, which accounts for more than half the top metal consumer's economy, highlighted companies' concerns over subdued economic conditions.

POSITIONING: The net speculative long was 11% of open interest as at Thursday's close, according to estimates by Marex Spectron.

TRADE DEAL: A Chinese delegation is planning to travel to Washington on Jan. 13 for the signing of the U.S.-China Phase 1 trade deal, the South China Morning Post reported on Sunday. 

A thawing in U.S-China trade tensions helped copper climb over 5% in December but analysts at Commerzbank said "subsequent negotiations of further partial agreements will prove far more difficult because they will address sensitive issues".

COPPER: Canadian miner First Quantum Minerals Ltd  is weighing investment of around $1 billion to lift output at Africa's biggest copper mine in Zambia despite a feud with the state miner over project funding. 

GOLDMAN: "Most recently (copper prices) were hit by the escalation in U.S.-Iran tensions and subsequent market risk-off," Goldman Sachs said in a note.

"Further escalation of geopolitical tensions has the potential to dampen economic activity and weaken base metals demand," analysts at the banks said, but they remained bullish on copper in 2020 due to depressed margins at smelters.

ALUMINIUM SPREADS: Cash aluminium deepened its discount over the three-month contract, pointing to plentiful supply. It stood at $31.59 a tonne, its deepest since mid-September. 

On-warrant inventories of aluminium in LME-approved warehouses rose to 938,650 tonnes.

Aluminium slipped 0.3% $1,818 a tonne, after jumping 1% the previous session.

OTHER METALS: Zinc rose to its highest in two weeks, up 0.5% to $2,318.50 a tonne, lead lost 0.6% to $1,908, tin CMSN3 was flat at $16,805 while nickeledged down 0.3%, after touching a near four-week low.

(Additional reporting by Naveen Thukral in Singapore and Tom Daly in Beijing; editing by Nick Macfie) ((zandi.shabalala@tr.com; +44 207 542 5937;))