January 24, 2019 / 5:33 AM / 4 months ago

METALS-Aluminium slips as near-term supply pinch expected to ease

 (Adds Shanghai closing prices, updates London prices)
    MELBOURNE/BEIJING, Jan 24 (Reuters) - London aluminium
prices slipped on Thursday from near one-month highs hit in the
previous session on expectations that a period of tight supply
will soon come to an end. 
    Cancelled aluminium warrants, or metal earmarked for removal
from London Metal Exchange (LME) warehouses, have surged in the
past 10 days to nearly 400,000 tonnes from 235,000 tonnes in the
middle of January, supporting prices. 
   However, the fundamentals for aluminium remain bearish, with
an obvious discrepancy between abundant supply and low
off-season demand in top consumer China, Everbright Futures
wrote in a note. 
   China saw its primary aluminium output hit an all-time
monthly high of over 3 million tonnes in December.
   With most Chinese smelters still losing money at current
prices, a "small rebound" is needed but it is difficult to tell
when the inflection point will come, the brokerage said. 
    * LME: Aluminium was down 0.7 percent at $1,896 a
tonne by 0731 GMT, after a 1.4 percent gain on Wednesday.     
    * RUSAL: The Trump administration is expected to lift
sanctions on companies linked to Russian oligarch Oleg
Deripaska, including Rusal, as soon as Friday. That
could mean that aluminium that had previously been caught by
sanctions is available to market.
    * SHFE: On the Shanghai Futures Exchange, aluminium
closed up 0.5 percent at 13,550 yuan ($2,000.71), having made
modest gains in six of the last seven days since hitting a
two-year low on Jan. 15.
    * OPEN INTEREST: Market open interest in ShFE aluminium
exceeded 750,000 lots on Wednesday, its highest since Nov. 15,
on short covering ahead of the week-long shutdown in China in
early February for Lunar New Year.
    * CHINA GROWTH: China's economy can maintain sustainable
rates of growth despite global uncertainties, Vice President
Wang Qishan said on Wednesday, days after the world's
second-largest economy posted its weakest expansion in nearly
three decades.
    * OTHER METALS: Copper edged down 0.3 percent in London
 to $5,932.50 a tonne as the entire LME complex traded
lower. Zinc lost 0.7 percent, while nickel was
down 0.7 percent. 
    * For the top stories in metals and other news, click       
    * Asian shares inched up in subdued trade on Thursday after
Wall Street ended higher, but political uncertainty in the
United States and worries about weakening global economic growth
kept many investors on the sidelines.    
 BASE METALS PRICES                       0738 GMT
 Three month LME copper                     5932.5
 Most active ShFE copper                     47320
 Three month LME aluminium                    1901
 Most active ShFE aluminium                  13550
 Three month LME zinc                       2599.5
 Most active ShFE zinc                       21475
 Three month LME lead                       2023.5
 Most active ShFE lead                       17600
 Three month LME nickel                      11635
 Most active ShFE nickel                     93600
 Three month LME tin                         20685
 Most active ShFE tin                       148250
 BASE METALS ARBITRAGE                            
 LME/SHFE COPPER              LMESHFCUc3    509.36
 LME/SHFE ALUMINIUM           LMESHFALc3  -1420.67
 LME/SHFE ZINC                LMESHFZNc3    377.74
 LME/SHFE LEAD                LMESHFPBc3     988.3
 LME/SHFE NICKEL              LMESHFNIc3   1725.81
($1 = 6.7897 Chinese yuan)

 (Reporting by Melanie Burton in MELBOURNE and Tom Daly in
BEIJING; editing by Shreejay Sinha and Subhranshu Sahu)
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