May 18, 2018 / 2:09 AM / 6 days ago

METALS-Aluminium drops for third session as stockpiles rise

    By Manolo Serapio Jr
    MANILA, May 18 (Reuters) - London aluminium futures slipped
for a third session in a row on Friday as inventories increased,
easing worries over a supply shortage in the aftermath of U.S.
sanctions on major Russian producer Rusal.
    On-warrant aluminium stocks in warehouses certified by the
London Metal Exchange - inventories that are not earmarked for
delivery - surged by 153,075 tonnes or 18 percent on Wednesday,
LME data showed on Thursday. MALSTX-TOTAL
    Three-month aluminium on the London Metal Exchange
was off 0.6 percent at $2,280 tonne by 0151 GMT, not far above
Thursday's two-week low of $2,248.50.
    "Markets are less worried of a prolonged deficit as Rusal
(is) set to boost aluminium exports after the U.S. relaxed its
sanctions against Rusal in late April," Commonwealth Bank of
Australia analyst Vivek Dhar said in a note.
    "LME aluminium cancelled warrants are now on par with levels
before the sanctions were announced, potentially meaning that we
could see some stability at these price levels."
    About two weeks after imposing sanctions on Rusal, the
United States last month gave American customers of Russia's
biggest aluminium producer more time to comply with sanctions,
and said it would consider lifting them if Rusal's major
shareholder, Russian tycoon Oleg Deripaska, ceded control of the
company.
         
    RUSAL: The shockwaves may have passed but the aluminium
market is still structurally stressed by the U.S. action against
Deripaska and Rusal. The price explosion after the original
April 6 sanctions announcement went into reverse on April 23,
but tensions caused by the partial lock-out from the global
market of the largest producer outside of China are still
evident.
    COPPER: LME copper dropped 0.3 percent to $6,855.50
a tonne following a two-day gain. In Shanghai, the most-traded
July copper contract on the Shanghai Futures Exchange
rose 0.3 percent to 51,210 yuan ($8,038) a tonne.            
    MARKETS: The dollar hit a four-month high against the yen,
buoyed by a rise in U.S. Treasury yields that suggests a more
upbeat outlook for the world's largest economy. Asian stocks
edged up.
    NICKEL DEFICIT: The global nickel market deficit widened to
15,700 tonnes in March from a revised deficit of 6,600 tonnes in
the previous month, the International Nickel Study Group said.

    JINCHUAN: China's Jinchuan Group International Resources
 plans to double its African copper and cobalt
production in the next two to three years.
    VEDANTA: Vedanta Resources Plc's Thootukudi copper
smelter, one of India's biggest, will remain shut until at least
June 6.
        
    DATA AHEAD (GMT)
    0600  Germany                Producer prices             Apr
    0600  Germany                Wholesale price index       Apr
    0900  Euro zone              Eurostat trade              Mar
    
 BASE METALS PRICES                                    0151 GMT
 Three month LME copper                                  6855.5
 Most active ShFE copper                                  51210
 Three month LME aluminium                                 2280
 Most active ShFE aluminium                               14785
 Three month LME zinc                                    3077.5
 Most active ShFE zinc                                    23685
 Three month LME lead                                    2357.5
 Most active ShFE lead                                    19530
 Three month LME nickel                                   14735
 Most active ShFE nickel                                 109640
 Three month LME tin                                      20700
 Most active ShFE tin                                    145120
                                                               
 BASE METALS ARBITRAGE                                         
 LME/SHFE COPPER               LMESHFCUc3                301.29
 LME/SHFE ALUMINIUM            LMESHFALc3              -2119.32
 LME/SHFE ZINC                 LMESHFZNc3                388.54
 LME/SHFE LEAD                 LMESHFPBc3                449.42
 LME/SHFE NICKEL               LMESHFNIc3              -1727.65
 
($1 = 6.3707 Chinese yuan)

    
 (Reporting by Manolo Serapio Jr.; editing by Richard Pullin)
  
 
 
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