January 11, 2018 / 5:20 AM / 11 days ago

METALS-Shanghai nickel hits 2-month high on tight stocks, output concerns

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Jan 11 (Reuters) - Nickel prices on the Shanghai
Futures Exchange (ShFE) climbed by more than 1 percent to their
highest in two months on Thursday, as concerns over low stock
levels and production outages lent support to the market.
    "Nickel cathode in the warehouses is very tight... so
there is some possibility to squeeze selling
positions," said Xu Aidong, chief nickel analyst, Antaike. 
    Deliverable ShFE nickel warehouse stocks stood at 48,920
tonnes as of Jan. 5, compared with over 90,000 tonnes a year
ago. 
    Four nickel mines in the Zambales region of the Philippines,
a key nickel exporter, remain shut on environmental grounds, an
official said on Thursday, while Japan's Sumitomo Corp
has suspended output at a mine in Madagascar following a
cyclone.
    "The four mines in Zambales are still not allowed to resume
production," said Wilfredo Moncano, director of the Philippine
Mines and Geosciences Bureau. "No extraction, no new mining
activities. What's only allowed is hauling of ores from their
stockpiles."
            
    FUNDAMENTALS
    * SHFE NICKEL: The most traded Shanghai nickel contract
 finished up 1.1 percent at 101,430 yuan ($15,587.83) a
tonne, its highest close since Nov. 8.
    * LME NICKEL: Benchmark nickel on the London Metal
Exchange (LME) was down 0.50 percent at $12,870 a tonne, as of
0720 GMT, partly reversing Wednesday's gains, when it touched
$13,200 a tonne, its highest since June 2015.
    * MADAGASCAR: Sumitomo said on Thursday the company and its
partners Sherritt International Corp and Korea Resources
Corp            halted output at the Ambatovy nickel mine in
Madagascar on Jan. 4, the day before Cyclone Ava hit the area. 

    * ALUMINIUM: The most-traded aluminium contract on the ShFE
 closed up 1.2 percent at 15,210 yuan per tonne, and was
up 1 percent in London. "This was a metal that you
couldn't give away 36 hours ago but now it seems the selling
from the index rebalancing is viewed as very digestible," broker
Marex Spectron said in a note on Thursday. 
    * DUNKIRK: Liberty House, the industrial arm of British
steel tycoon Sanjeev Gupta's GFG Alliance, has made a binding
offer for miner Rio Tinto's aluminium smelter
in Dunkirk, France, the largest in Europe.    
    * COPPER: Three-month copper on the LME was up 0.1
percent at $7,163 a tonne, building on its 0.7 percent gain in
the previous session. The most-traded SHFE copper contract
 closed up 0.4 percent at 55,110 yuan a tonne.
    * CHINA: Tongling Nonferrous Metals Group, one
of China's top copper smelters, will suspend production at its
Jinguan Copper unit for three days from Friday for repairs, a
source familiar with the matter said.
    * PERU: The government of Peruvian President Pedro Pablo
Kuczynski is evaluating a $2.4 billion railway project to
transport mineral concentrates from a copper-rich Andean region
to the Pacific coast for export.    
    * COBALT: Democratic Republic of Congo is considering more
than doubling royalties on cobalt, a key ingredient in
lithium-ion batteries, under a new mining code nearing
parliamentary approval, the mines minister said on Wednesday.

    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * The New Year rally in Asian shares petered out on Thursday
due to concerns about rising U.S. protectionism, while bonds
rebounded after China's regulator called a report about Beijing
slowing or halting of its U.S. bond buying possibly wrong.

       
        
        PRICES        
       
 BASE METALS PRICES                        0720 GMT
 Three month LME copper                        7163
 Most active ShFE copper                      55100
 Three month LME aluminium                     2199
 Most active ShFE aluminium                   15210
 Three month LME zinc                          3362
 Most active ShFE zinc                        26255
 Three month LME lead                        2558.5
 Most active ShFE lead                        19385
 Three month LME nickel                       12870
 Most active ShFE nickel                     101410
 Three month LME tin                          20010
 Most active ShFE tin                        145160
                                                   
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER             LMESHFCUc3       719.9
 LME/SHFE ALUMINIUM          LMESHFALc3    -1445.42
                                         
 LME/SHFE ZINC               LMESHFZNc3      380.23
 LME/SHFE LEAD               LMESHFPBc3     -676.22
 LME/SHFE NICKEL             LMESHFNIc3     1668.01
                                         
 ($1 = 6.5070 Chinese yuan)

    
 (Reporting by Tom Daly; additional reporting by Enrico Dela
Cruz in Manila; Editing by Sherry Jacob-Phillips and Subhranshu
Sahu)
  
 
 
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