April 18, 2018 / 3:48 AM / a month ago

METALS-Aluminium hits 6-1/2-year peak on supply worries; nickel rallies

 (Updates prices)
    By Manolo Serapio Jr
    MANILA, April 18 (Reuters) - London aluminium futures rose
to their strongest level since 2011 on Wednesday amid growing
worries over tighter supply, while nickel surged more than 4
percent to a three-year peak.
    U.S. sanctions on major aluminium producer Rusal have pushed
aluminium prices by more than 20 percent since the sanctions
began earlier this month. Some traders and analysts were puzzled
about the sudden spike in nickel prices, with some attributing
it to technical factors.
    Global miner Rio Tinto said adjustments may
be made to its 2018 aluminium output following sanctions on its
Russian partner UC Rusal imposed by the United States
earlier this month.
    "The sanctions against Rusal and resulting dissociation with
Rusal by its banks, suppliers, customers and related parties
resulted in heightened concern about a global supply shortage,"
said Helen Lau, analyst at Argonaut Securities. 
    Three-month aluminium on the London Metal Exchange
climbed as high as $2,458 a tonne, its strongest since September
2011, and was trading at $2,449.50 by 0738 GMT, up 1.9 percent.
    There was little impact on base metals prices from China's
surprise move to cut banks' reserve requirement ratio (RRR),
which only lifted Chinese steel, coke and
coking coal futures sharply.
    "The RRR cut was positive, but it may not have very
significant impact on financial markets. In terms of size, the
steel market is also much bigger than base metals," said CRU
analyst Wan Ling.    
    China's central bank unexpectedly said it will reduce the
cash banks hold as reserves by 100 basis points from April 25.
But the move falls short of broad monetary easing, with the
authority attaching requirements on how funds must be used.
        
    SHANGHAI ALUMINIUM: On the Shanghai Futures Exchange, the
most-traded June aluminium contract closed 0.5 percent
higher at 14,930 yuan ($2,376) a tonne, just below a nearly
three-month high reached on Tuesday.
    LME NICKEL: Nickel was the day's outperformer, surging
almost 5 percent at one stage to hit $14,870 a tonne, the
highest since February 2015. It was last up 4.2 percent at
$14,805. 
    RIO TINTO: Rio last week declared force majeure on some
customer contracts in light of the sanctions on Rusal, the
world's second biggest aluminium producer, and said it is
reviewing Rusal's 20 percent stake in its Queensland Alumina
refinery.
    RUSAL HALTS ORDERS: Rusal has stopped placing orders with
two logistics firms that ship its exports, in a sign of
deepening problems for the company.
    JAPAN TRADERS: Major Japanese trading houses have asked
Rusal to stop shipping refined aluminium and other products and
are scrambling to secure metal elsewhere, industry sources said.

    ALUMINA: Prices of alumina, the raw material for making
aluminium, have surged after Rio Tinto said it could not fulfil
supply contracts because of the sanctions on Rusal.
    CHINA RRR CUT: The People's Bank of China said banks must
use most of the freed-up liquidity to pay back relatively costly
loans obtained via the central bank's medium-term lending
facility.
    ALUMINIUM SHEET: The U.S. Commerce Department said it has
made a preliminary determination that aluminium sheet imports
from China are being subsidized.
    NORNICKEL: Russia's Norilsk Nickel, or Nornickel,
is in talks with battery makers over possible investment in its
mining assets, but is also interested in downstream joint
ventures in return, a company executive said.
    INDONESIA EXPORTS: Indonesia exported 8,637,595 tonnes of
nickel ore up to March 31, 2018 since its ore export policy was
revised in January, 2017, government data showed.  
 
    COPPER: Benchmark LME copper rose 0.8 percent to
$6,933.50 a tonne. In Shanghai, copper gained 0.6
percent to end at 51,170 yuan.        
    MARKETS: Asian shares edged higher, tracking gains on Wall
Street, with Chinese equities ending firmer after Beijing
boosted liquidity in the banking system. The dollar edged up.

        
                                            0738 GMT
 Three month LME copper                       6933.5
 Most active ShFE                              51170
 copper                                
 Three month LME                              2449.5
 aluminium                             
 Most active ShFE                              14930
 aluminium                             
 Three month LME zinc                         3181.5
 Most active ShFE zinc                         23895
 Three month LME lead                         2364.5
 Most active ShFE lead                         18170
 Three month LME                               14805
 nickel                                
 Most active ShFE                             104750
 nickel                                
 Three month LME tin                           21370
 Most active ShFE tin                         145690
                                                    
                                                    
 LME/SHFE COPPER         LMESHFCUc3           412.26
 LME/SHFE ALUMINIUM      LMESHFALc3         -2924.29
 LME/SHFE ZINC           LMESHFZNc3           100.88
 LME/SHFE LEAD           LMESHFPBc3             20.6
 LME/SHFE NICKEL         LMESHFNIc3         -5649.89
 ($1 = 6.2833 Chinese yuan)

    
 (Reporting by Manolo Serapio Jr.; editing by Vyas Mohan and
Gopakumar Warrier)
  
 
 
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