October 26, 2017 / 2:38 AM / a year ago

METALS-London aluminium hits five-year high on China supply cuts

    MELBOURNE, Oct 26 (Reuters) - London aluminium surged to its highest in more than five years
on Thursday on expectations of dwindling supply as China aluminium makers cut production over
    * London Metal Exchange aluminium crashed through $2,200 to peak at $2211 a tonne,
the highest since March 2012. Prices traded at $2204 a tonne by 0155 GMT. 
    * Shfe aluminium hit its highest in more than a week at 16,555 yuan ($2,496), but
remained well below their recent near eight-year high of 17,345 yuan a tonne from last month. 
    * The move in LME aluminium came amid a weaker dollar, improving chart picture, and options
positioning traders said. A weaker dollar makes metals more affordable for buyers paying with
other currencies.
    * "After a quiet few weeks, aluminium feels like it is finding a decent base into $2,125-15
and should we break above $2,175 it might trigger another run at $2,200, which has the biggest
open interest for November expiry (over 4,000 lots open)," broker Marex Spectron said in a
report overnight. 
    * Other metals were also supported with LME zinc and nickel up 0.7 percent
and 0.2 percent, respectively. London copper was steady above the $7,000 mark, not far
from a three-year high of $7,177 a tonne hit earlier this month. 
    * In Shanghai, zinc rallied 1.5 percent but Shfe nickel fell 0.6 percent.
Shanghai rebar prices fell 2 percent, which could drag down steel inputs nickel and
zinc later in the session. 
    * The euro inched higher on Thursday, as investors awaited details of the European Central
Bank's plans for scaling back its bond-buying stimulus programme, while the dollar took a
breather after its recent rally.
    * US ECONOMY: New orders for key U.S.-made capital goods increased more than expected in
September and shipments rose for an eighth straight month, pointing to robust business spending
that should help to mitigate the impact on the economy from the hurricanes.
    * Norsk Hydro said on Wednesday curtailments of primary production in China have driven
positive sentiment and could result in a tighter aluminium market in 2018.
    * China Zhongwang Holdings Ltd said on Thursday it had acquired a controlling
stake in an Australian all-aluminium superyacht builder, as the Chinese firm aims to expand the
application of aluminium in the marine sector.
    * For the top stories in metals and other news, click or     
    * Asian stocks stalled on Thursday, weighed as Wall Street shares pulled back from record
highs, while the euro stretched gains ahead of a European Central Bank policy meeting at which
it could take a major step away from accommodative policy.    
 BASE METALS PRICES                0211 GMT         
 Three month LME copper                       7007.5
 Most active ShFE copper                       54840
 Three month LME aluminium                      2210
 Most active ShFE aluminium                    16500
 Three month LME zinc                           3217
 Most active ShFE zinc                         26045
 Three month LME lead                           2491
 Most active ShFE lead                         19280
 Three month LME nickel                        11865
 Most active ShFE nickel                       95350
 Three month LME tin                           19840
 Most active ShFE tin                         145190
 BASE METALS ARBITRAGE                              
 LME/SHFE COPPER                LMESHFCUc3    471.16
 LME/SHFE ALUMINIUM             LMESHFALc3   -529.02
 LME/SHFE ZINC                  LMESHFZNc3     606.7
 LME/SHFE LEAD                  LMESHFPBc3   -701.72
 LME/SHFE NICKEL                LMESHFNIc3    2396.7

    ($1 = 6.6317 Chinese yuan)

 (Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips)
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