January 31, 2019 / 5:27 AM / 6 months ago

METALS-Base metals rise on dovish Fed; zinc hits 3-month high

 (Updates prices, graphic)
    BEIJING, Jan 31 (Reuters) - Most base metals rose on
Thursday after the U.S. Federal Reserve said it would be patient
with interest rate hikes, although a second straight monthly
contraction in manufacturing activity in top metals consumer
China capped gains.
    Lower interest rates tend to push commodity prices higher
because they mean lower inventory financing costs.
    Zinc, used to galvanise steel, hit its highest since October
in London, while nickel advanced for a third day -- and a sixth
session in seven -- as fears grew that the disaster at Vale's
iron ore mine in Brazil will impact other metals.
    "Vale is one of the world's largest nickel producers, and
there are increasing concerns that the company may be forced to
close its Brazil nickel operations as it undertakes an
environmental audit," ANZ wrote in a note.
    Nickel is on track to rise more than 15 percent in January,
the most in the base metals complex, as inventories hover just
above their lowest since 2013 MNISTX-TOTAL, followed by zinc.
    FUNDAMENTALS
    * ZINC: Three-month zinc on the London Metal Exchange
 zinc rose as much as 0.9 percent to $2,710, the highest
since Oct. 24.
    * COPPER: LME copper climbed 0.3 percent to $6,152 a
tonne as of 0440 GMT, while the most-traded contract on the
Shanghai Futures Exchange closed up 0.7 percent at
48,090 yuan ($7,179.97). 
    * JIANGXI: Shares in China's Jiangxi Copper Co
rose as much as 5.3 percent to their highest since August after
the company said it expects its 2018 profit to increase by 50
percent.
    * USD: The dollar index was down 0.2 percent at 95.17
and near a three-week low, after falling 0.43 percent overnight.
 
    * CHINA: The official Purchasing Managers' Index (PMI) for
January ticked up fractionally to 49.5, but remained below the
50-point level that separates growth from contraction on a
monthly basis.
    * NICKEL: Russia's Norilsk Nickel, which vies with
Vale to be the world's top nickel producer, plans to boost
nickel output to 220,000-225,000 tonnes this year.
     * ALUMINIUM: London aluminium edged up 0.2 percent
to $1,914 a tonne and is heading for its best month since April,
when prices spiked on the now-withdrawn U.S. sanctions on Rusal.
    * For the top stories in metals and other news, click       
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    MARKETS NEWS    
    * Asia stocks rose to a four-month high after the Federal
Reserve signalled a potential end to its tightening cycle amid
signs of slowing global growth.    
        
    PRICES
 BASE METALS PRICES                       0745 GMT
 Three month LME copper                   6153.5
 Most active ShFE copper                  48060
 Three month LME aluminium                1916
 Most active ShFE aluminium               13510
 Three month LME zinc                     2708
 Most active ShFE zinc                    22170
 Three month LME lead                     2095.5
 Most active ShFE lead                    17420
 Three month LME nickel                   12370
 Most active ShFE nickel                  97800
 Three month LME tin                      20820
 Most active ShFE tin                     148250
                                          
 BASE                                     
   METALS ARBITRAGE                       
 LME/SHFE COPPER              LMESHFCUc3  265.5
 LME/SHFE ALUMINIUM           LMESHFALc3  -1357.18
 LME/SHFE ZINC                LMESHFZNc3  464.22
 LME/SHFE LEAD                LMESHFPBc3  618.14
 LME/SHFE NICKEL              LMESHFNIc3  1041.8
 

($1 = 6.6978 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; Editing by Richard Pullin and Shreejay
Sinha)
  
 
 
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