(Adds comment, detail)
By Melanie Burton
MELBOURNE, Aug 16 (Reuters) - London zinc hit its highest in
almost a decade on Wednesday as Chinese infrastructure demand
that has fed a rally in steel prices for months spills into
markets for steelmaking raw materials.
The rally in zinc, used for galvanising steel, comes as
China steps up plans to develop infrastructure while capacity
cuts in its steel industry boost prices, said analyst Daniel
Hynes of ANZ in Sydney.
"There (was) a fair level of scepticism at the start of the
year when China's infrastructure projects were announced but
we're seeing much better-than-expected growth in fixed asset
investment," said Hynes. "That resetting of expectations is
resulting in that much more positivity to the sector."
FUNDAMENTALS
* LME ZINC: London Metal Exchange zinc peaked at
$2,994 a tonne, having cracked its Nov. 2016 high to take prices
back to their most expensive since Oct. 2007.
* CHINA GROWTH: China's strong economic growth showed
visible signs of fading in July as lending costs rose and the
gravity-defying property market cooled, though activity levels
generally remained solid, propped up by a year-long construction
spree.
* FIXED ASSET: China fixed-asset investment still grew 8.3
percent in the first seven months of the year, even as it slowed
from 8.6 percent in the first half.
* STEEL: Gains came even as Chinese steel and iron ore
futures slipped for a fourth session as recent moves by the
Shanghai exchange to increase trading charges kept the two
commodities under pressure.
* ALUMINIUM: LME aluminium hit its highest since
November, 2014 as China reforms its bloated aluminium sector.
* HONGQIAO: The world's top aluminium maker, China Hongqiao
Group clarified in a notice to the Hong Kong Exchange
that it has shut down 2.68 million tonnes of production
capacity, representing 29 percent of the group's total aluminium
product capacity.
* COPPER: LME copper rose by half-a-percent to
$6,409 a tonne, still below its most recent 2-1/2 year top at
$6,515.
* FREEPORT: Flash floods have caused extensive damage to a
power plant at U.S.-owned miner Freeport Indonesia's operations,
company officials said on Wednesday.
* SHANGHAI: On the Shanghai Futures Exchange, copper
was little changed, but zinc and aluminium
finished up around 2 percent.
* M&A: Mergers and acquisitions by Chinese companies in
countries that are part of the Belt and Road initiative are
soaring, even as Beijing cracks down on China's acquisitive
conglomerates to restrict capital outflows.
* COMING UP: U.S. housing starts, building permits for July
at 1230 GMT
PRICES
BASE METALS PRICES 0723 GMT
Three month LME copper 6402.5
Most active ShFE 50170
copper
Three month LME 2063.5
aluminium
Most active ShFE 16095
aluminium
Three month LME zinc 2997
Most active ShFE zinc 24740
Three month LME lead 2406
Most active ShFE lead 19440
Three month LME nickel 10470
Most active ShFE 85370
nickel
Three month LME tin 20015
Most active ShFE tin 143410
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc3 220.47
LME/SHFE ALUMINIUM LMESHFALc3 22.59
LME/SHFE ZINC LMESHFZNc3 775.53
LME/SHFE LEAD LMESHFPBc3 -76.17
LME/SHFE NICKEL LMESHFNIc3 1937.67
(Reporting by Melanie Burton; Editing by Joseph Radford and
Kenneth Maxwell)
Our Standards: The Thomson Reuters Trust Principles.