(Adds Shanghai closing prices)
BEIJING/MELBOURNE, Oct 26 (Reuters) - London aluminium surged to its highest in more than
five years on Thursday on expectations of dwindling supply of both aluminium and its raw
materials, as China imposes restrictions on industrial output over winter.
The seasonal curbs on aluminium production itself will not be as severe as expected,
analysts at Standard Chartered said in a note, referring to an apparent reprieve for top
producer China Hongqiao Group, which looks to have escaped a full 30 percent cut.
"However, new price support has emerged in the form of cost inflation related to the
still-rigorous application of upstream winter heating-season capacity cuts for both alumina
refineries and other raw material production," they added.
FUNDAMENTALS
* London Metal Exchange aluminium peaked at $2,211 a tonne, the highest since March
2012. Prices traded at $2,202.50 a tonne, as of 0718 GMT.
* Shfe aluminium closed up 1 percent at 16,490 yuan ($2,485.72) a tonne, levels not
seen in more than a week, 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.
* Other metals were also supported with LME zinc and nickel up 0.6 percent
and 0.1 percent, respectively. London copper dipped 0.3 percent to just below the $7,000
mark, having hit a three-year high of $7,177 a tonne hit earlier this month.
* In Shanghai, zinc closed up 1 percent, but Shfe nickel finished down 0.5
percent. Shanghai rebar prices closed down 1.7 percent.
MARKET NEWS
* 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 extrusion firm aims to
expand the application of aluminium in the marine sector.
* Embattled Kobe Steel Ltd said on Thursday a Japanese Industrial Standards (JIS)
certificate for some copper products made at its Hatano plant near Tokyo has been revoked
because of data falsification.
* Aluminum Corp of China Ltd and Jiangxi Copper are due to report
third-quarter earnings on Thursday.
* For the top stories in metals and other news, click or
BASE METALS PRICES 0718 GMT
Three month LME 6995
copper
Most active ShFE 54760
copper
Three month LME 2202.5
aluminium
Most active ShFE 16490
aluminium
Three month LME 3216.5
zinc
Most active ShFE 26000
zinc
Three month LME 2486
lead
Most active ShFE 19105
lead
Three month LME 11875
nickel
Most active ShFE 95600
nickel
Three 19825
month LME tin
Most active ShFE 145260
tin
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc3 514.36
LME/SHFE ALUMINIUM LMESHFALc3 -482.6
3
LME/SHFE ZINC LMESHFZNc3 535.99
LME/SHFE LEAD LMESHFPBc3 -828.5
1
LME/SHFE NICKEL LMESHFNIc3 2228.9
7
($1 = 6.6339 Chinese yuan)
(Reporting by Melanie Burton and Tom Daly in BEIJING; Editing by Sherry Jacob-Phillips and Biju
Dwarakanath)
