April 13, 2018 / 6:45 AM / 3 months ago

METALS-London aluminium eyes biggest weekly jump in 38 years on Rusal sanction

 (Updates prices)
    By Melanie Burton
    MELBOURNE, April 13 (Reuters) - London aluminium slipped on
Friday but was on track for its biggest weekly gain on record
after the United States imposed sanctions on Russia's UC Rusal,
the world's second biggest producer of the metal, raising supply
concerns.
    Traders have this week scrambled to stockpile aluminium,
given customers who can no longer take Rusal metal will have to
find a fresh source of supply in what is an already
fast-tightening market.
    After a decade of oversupply, the global aluminium market
has facing a deficit of some 800,000 tonnes already this year,
said Dominic Schnider of UBS in Singapore.
    "We have a bullish view on aluminium with $2,400 as a target
in three months. That's really based on the perception that
overall supply growth is constrained by China and they have
genuine interest in keeping an eye on capacity," Schnider said.
    
    FUNDAMENTALS
    * London Metal Exchange aluminium fell by 1.6
percent to $2,287.50, trimming gains for the week that were
still approaching 14 percent. Prices topped out at $2,325 a
tonne on Thursday which was a six-year high. A trader noted very
wide spreads, reflecting an unusual lack of liquidity in the
LME's biggest contract. 
     * RUSAL: U.S. sanctions on Russian businesses and
individuals are hitting companies, including aluminium giant
Rusal controlled by tycoon Oleg Deripaska, and
triggering responses across markets.
     * US ALUMINIUM STOCKS: Almost all the aluminium in the
United States was removed from Comex warehouses this week.
Stocks tumbled by about 44,000 tonnes to 11,168 tonnes.
AL-TTLTTDY-STX
    * SCRAMBLE: The rush for stocks was also reflected in time
spreads on the LME with soaring prices for cash aluminium
against the benchmark three-month contract. Cash aluminium
traded $52 against three months, the highest in more than a
decade. CMAL0-3
    * CHINA ALUMINIUM: China's aluminium exports in March rose
to their highest since June as favourable pricing led the
world's biggest producer to sell more abroad even as the nation
faces scrutiny over its trade practices.
    * CHINA EXPORTS: China's exports growth overall unexpectedly
fell in March, the first drop since February last
year.
    * COPPER: LME copper edged up by 0.1 percent to
$6,828.50 a tonne by 0730 GMT, following a 1.9 percent drop from
the previous session. Prices have support at the 200-day moving
average of $6,743. Shanghai Futures Exchange copper
eased by 0.7 percent.
    * POLLUTION: In what could potentially help U.S. aluminium
makers boost production more quickly, U.S. President Donald
Trump on Thursday ordered the Environmental Protection Agency to
speed up its decision-making on air quality permitting to make
it easier for manufacturers to expand and open new plants.

    * OTHER METALS: Both Shfe aluminium and nickel
 closed nearly 2 percent higher in volatile trade, while
Shfe zinc closed nearly 2 percent down, on talks of
China's state reserves selling metal. 
        
    PRICES    
  
 BASE METALS PRICES                   0727 GMT             
 Three month LME copper                              6823.5
 Most active ShFE copper                              50510
 Three month LME aluminium                             2282
 Most active ShFE aluminium                           14570
 Three month LME zinc                                  3114
 Most active ShFE zinc                                23510
 Three month LME lead                                  2336
 Most active ShFE lead                                18350
 Three month LME nickel                               13915
 Most active ShFE nickel                             103760
 Three month LME tin                                  20950
 Most active ShFE tin                                143100
                                                           
 BASE METALS ARBITRAGE                                     
 LME/SHFE COPPER                LMESHFCUc3           510.81
 LME/SHFE ALUMINIUM             LMESHFALc3         -2055.42
 LME/SHFE ZINC                  LMESHFZNc3           232.17
 LME/SHFE LEAD                  LMESHFPBc3           212.92
 LME/SHFE NICKEL                LMESHFNIc3            374.4
 
($1 = 6.2886 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Subhranshu Sahu)
  
 
 
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