August 18, 2017 / 10:32 AM / 3 months ago

METALS-Zinc set for biggest weekly gain since November

* LME/ShFE arb: tmsnrt.rs/2oQ5nm20 (Updates with closing prices)

By Peter Hobson

LONDON, Aug 18 (Reuters) - Zinc prices were on track on Friday for their biggest weekly rise since November, as a sharp fall in stocks held the metal near its highest in a decade.

Aluminium and copper also ended the week near multi-year highs and nickel touched its highest level since March after a wave of speculative buying underpinned by expectations of strong demand in China, the world’s biggest metals consumer.

“A couple of weaker data points from China this week are not really going to derail the demand story. At the same time the supply of all industrial metals is generally quite tight,” said ETF Securities strategist Nitesh Shah.

Prices could rise further as Chinese demand will likely remain solid until at least the end of the year, Shah said.

LME ZINC: Benchmark zinc on the London Metal Exchange closed up 2 percent at $3,124 a tonne after hitting a ten-year high of $3,150. It was set for a weekly rise of 7.9 percent.

STOCKS: Prices were boosted by a fall in on-warrant stocks available to the market in LME-registered warehouses to 126,650 tonnes, after 23,050 tonnes of cancellations. On-warrant stocks have slid 60 percent this year. MZNSTX-TOTAL

CHINA TRADERS: A rise in steel trading fees this week prompted Chinese traders to divert money to zinc, fuelling its rise.

CHINA ECONOMY: Chinese home price growth slowed in July, but a construction spree is still supporting the economy and the International Monetary Fund this week upgraded its short-term growth forecasts.

SPECULATORS: Traders said price rises had triggered pre-set buy orders and speculative fund buying across several industrial metals, though profit-taking and forward selling by producers was limiting gains.

LME ALUMINIUM: Benchmark aluminium closed down 0.7 percent at $2,062 but still close to the Thursday’s peak of $2,112, the highest since September 2014. It was up 0.8 percent this week on expectations of capacity cuts in China.

CHALCO: China’s Chalco however said it increased primary aluminium output by 250,000 tonnes in the first half of 2017.

LME COPPER: Benchmark copper did not trade but was bid down 0.1 percent at $6,485 a tonne after hitting $6,580 on Thursday, the highest level since November 2014. It was set for a weekly gain of 1.1 percent.

SURPLUS: The global copper market had a surplus of 14,000 tonnes over Jan-May.

CHINA SCRAP: China provided the first detail of a ban on scrap imports, saying it would still allow imports of some kinds of steel and non-ferrous scrap.

PRICES: Nickel finished up 2.4 percent at $10,980 after reaching $11,055, the highest level since March 7 while lead ended down 2.2 percent at $2,361.50 and tin closed 0.2 percent higher at $20,240 a tonne.

Additional reporting by James Regan; Editing by David Evans, Greg Mahlich

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