March 15, 2018 / 2:39 AM / 6 months ago

METALS-LME aluminium teeters near 3-mth low as China smelters ramp up

    MELBOURNE, March 15 (Reuters) - London aluminium hovered
near its lowest since late December on Thursday on expectations
of rising supply as China's winter pollution controls expire.
    
    FUNDAMENTALS
    * ALUMINIUM: London Metal Exchange aluminium crept
up 0.2 percent to $2,094 a tonne, having slipped to the weakest
since Dec. 19 at $2,087 on Wednesday. Support is seen at the 200
moving day average at $2,083, a break of which could trigger a
steeper correction, as it would send a sell signal to momentum
following funds.
    * SHFE: Shanghai aluminium hit its lowest in 14
months at 13,820 yuan ($2,191) on Tuesday and last traded at
13,950 yuan.
    * SMOG: The winter heating season ended on Thursday.
Aluminium smelters in 28 northern Chinese cities had been told
to reduce output by at least 30 percent from Nov. 15 to March
15, although the actual volume cut was below expectations,
putting pressure on prices.
    * OUTPUT: China's aluminium production fell 1.8 percent in
January-February from a year earlier, data showed on Wednesday,
as the country's pollution crackdown and supply-side reform
kicked in. An estimated 4.4 million tonnes of new capacity are
expected to be completed this year 
    * STOCKS: Shfe aluminium AL-STX-SGH stockpiles held at
exchange warehouses are within a whisker of record highs near
850,000 tonnes, reflecting a surplus of domestic material. 
    * DISCOUNT: The discount between cash Shfe and
physical prices AL-A00-CCNMM has narrowed to 35 yuan from 385
three weeks ago, reflecting a tightening market and an expected
pick-up in nearby demand. 
    * COPPER: LME copper traded up 0.3 percent at $7,006
a tonne by 0157 GMT, adding to 0.6 percent gains from the
previous session. Prices are expected to rise over the coming
month as industrial production in the seasonally strongest
second quarter ramps up.
    * TRADE: The Trump administration is pressing China to cut
its trade surplus with the United States by $100 billion, a
White House spokeswoman said on Wednesday.
    * COBALT: Glencore, the world's biggest producer of
cobalt, has agreed to sell around a third of its cobalt
production over the next three years to Chinese battery recycler
GEM.
    * SMOG: Eastern China's Jiangsu province will step up its
war on pollution and focus on "high-quality development"
following a spike in smog early this year.
    * DOLLAR: Supporting metals, the dollar fell against the yen
on Thursday as lingering worries about global trade tensions
weighed on investors' risk appetite.
        
    DATA AHEAD (GMT)
    1230  U.S. New York Fed manufacturing Mar
    1230  U.S. Import prices Feb
    1230  U.S.  Export prices Feb
    1230  U.S. Weekly jobless claims
    1230  U.S. Philly Fed business index Mar
    1400  U.S. NAHB housing market index Mar    
    PRICES    
    
 BASE METALS PRICES                       0142 GMT          
 Three month LME copper                               7004.5
 Most active ShFE copper                               52360
 Three month LME aluminium                              2093
 Most active ShFE aluminium                            13945
 Three month LME zinc                                   3233
 Most active ShFE zinc                                 24810
 Three month LME lead                                   2395
 Most active ShFE lead                                 18495
 Three month LME nickel                                13835
 Most active ShFE nickel                              104200
 Three month LME tin                                   21195
 Most active ShFE tin                                 144820
                                                            
 BASE METALS ARBITRAGE                                      
 LME/SHFE COPPER                    LMESHFCUc3        939.75
 LME/SHFE ALUMINIUM                 LMESHFALc3      -1367.78
 LME/SHFE ZINC                      LMESHFZNc3        643.77
 LME/SHFE LEAD                      LMESHFPBc3        153.53
 LME/SHFE NICKEL                    LMESHFNIc3        976.21
 

($1 = 6.3075 Chinese yuan renminbi)

    
 (Reporting by Melanie Burton; editing by Richard Pullin)
  
 
 
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