November 4, 2019 / 5:13 AM / 9 months ago

METALS-LME aluminium hits over 6-week peak on supply fears

(Updates prices)

By Mai Nguyen

SINGAPORE, Nov 4 (Reuters) - London aluminium prices rose to their highest in more than six weeks on Monday on worries of a supply shortage after stocks of the metal used in transport and packaging dropped.

Benchmark three-month aluminium on the London Metal Exchange (LME) rose as much as 0.3% to $1,792 a tonne, its highest since Sept. 20. The contract was up 0.1%, as of 0706 GMT.

The most active aluminium contract on the Shanghai Futures Exchange (ShFE) ended 0.8% higher after advancing as much 0.9% to 13,960 yuan ($1,987.84) a tonne, its highest since Oct. 9, earlier in the session.

Miner Rio Tinto Ltd last month said high energy costs have made its Australian aluminium assets unsustainable and flagged that it may cut output or shut its New Zealand's Aluminium Smelter.

However, demand for aluminium remained weak, and the price rally may end soon, said analyst Jackie Wang of CRU Group.

"Prices could just be range bound (from current level). Of course, if there is any unexpected extra supply disruption, that would be another story," Wang added.


* ALUMINIUM STOCKS: Aluminium stocks in warehouses tracked by ShFE AL-STX-SGH dropped to their lowest since March 2017 at 278,736 tonnes, while LME aluminium inventories MALSTX-TOTAL dipped to their lowest since Sept. 30 at 956,200 tonnes.

* SPREAD: The difference between the LME aluminium cash and three month contracts CMAL0-3 flipped to a premium for the first time since January to $4.75 a tonne, indicating tight nearby supplies.

* ALUMINIUM DEMAND: The anti-plastic trend and electric cars are expected to boost aluminium consumption, Novelis senior vice president and Europe president Emilio Braghi said.

* BALANCE: The global aluminium market is due to flip into a surplus of 304,000 tonnes next year from a deficit of 658,500 tonnes in 2019, a recent Reuters poll showed.

* BAUXITE: Malaysia will issue bauxite mining licences to companies in December or January, a minister said on Monday, marking a resumption in activity after a ban was put in place in early 2016 over unregulated mining and water contamination.

* LME WAREHOUSE: The London Metal Exchange will allow warehouses in its network to extend queues for loading out metal, and will require them to report stocks stored outside the LME system that could be brought in at a later date.

* TRADE DEAL: The United States and China on Friday said they made progress in talks aimed at defusing a nearly 16-month-long trade war that has harmed the global economy, and U.S. officials said a deal could be signed this month.

* LME PRICES: LME copper edged up 0.2% to $5,862.50 a tonne, nickel fell 0.5% to $16,690 a tonne, zinc rose 0.7% to $2,538 a tonne and lead edged up 0.1% to $2,165.50 a tonne.

* SHFE PRICES: ShFE copper edged up 0.1% to 47,040 yuan a tonne, nickel rose 0.7% to 134,230 yuan a tonne, zinc advanced 0.8% to 19,085 yuan a tonne while lead fell 0.4% to 16,470 yuan a tonne.

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Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

ARBS ($1 = 7.0227 Chinese yuan renminbi)

Reporting by Mai Nguyen; Editing by Aditya Soni and Amy Caren Daniel

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