March 12, 2018 / 12:13 PM / 2 months ago

METALS-Aluminium slips ahead of Chinese smelter restarts

* LME/ShFE arb: bit.ly/2wZSAEz (Updates with closing prices)

By Peter Hobson

LONDON, March 12 (Reuters) - Aluminium slipped to its lowest in almost three months on Monday, three days before the end of winter output curbs in top producer China, as investors worried that supplies are too plentiful to keep prices near six-year highs.

Benchmark aluminium on the London Metal Exchange (LME) closed 1.4 percent lower at $2,091 a tonne, the lowest since Dec. 20 and down nearly 9 percent from a high in early January.

Aluminium on the Shanghai Futures Exchange (ShFE) closed at the lowest in 14 months.

Prices have been pressured by sharp increases in stocks in ShFE and LME warehouses, despite restrictions on Chinese smelter production from Nov. 15 to March 15. AL-STX-SGH MALSTX-TOTAL

Industry sources say there may be only a limited restart by these smelters from March 15 because prices are not high enough for some to break even.

Any increase in output could drive prices lower.

“We are going to trend down below $2,100 in the first half of the year because of this China surplus,” ING analyst Oliver Nugent said.

But he said prices on the LME would likely rise again later in the year because of a persistent shortage of metal outside China.

ALUMINIUM SPREADS: The price of cash aluminium has fallen below the three-month price, suggesting greater nearby availability of metal and taking pressure off prices. MAL0-3

PREMIUMS: Some Japanese aluminium buyers have agreed to pay some global producers a premium of $129 per tonne for shipments in the April to June quarter, the highest in three years.

COPPER: LME copper finished down 0.7 percent at $6,913 a tonne after a 10,000-tonne rise in stocks in LME-registered warehouses to 321,125 tonnes suggested ample supply of the metal. Prices remain near 4-year highs hit in December. MCUSTX-TOTAL

CHILE STRIKE: Workers at Antofagasta’s 350,000-tonne-a-year Los Pelambres copper mine in Chile rejected an offer for a new labour contract, paving the way for a strike and reviving concerns that a series of labour disputes will disrupt supplies this year.

POSITIONING: Speculators reduced bets on higher prices, with the net long in Comex copper falling to the lowest since November 2016.

CHINA FUNDS: Two Chinese brokerages with large long positions in ShFE copper sharply scaled back their positions, exchange data showed.

NICKEL: Nickel ended down 1.3 percent at $13,675 a tonne. Prices jumped 4.4 percent on Friday after the number of cancelled warrants in LME warehouses - metal earmarked for delivery and unavailable to the market - increased to 38 percent of total warrants from 30 percent. MNISTX-TOTAL

OTHER METALS: LME zinc closed down 1.1 percent at $3,239.50 a tonne, lead finished 1.4 percent lower at $2,343 and tin ended unchanged at $21,375.

Additional reporting by Tom Daly, editing by Ed Osmond, Adrian Croft and Peter Graff

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below