December 20, 2017 / 5:44 AM / a year ago

METALS-Shanghai aluminium climbs over 1 pct on alumina shortages

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Dec 20 (Reuters) - Shanghai aluminium prices rose
over 1 percent on Wednesday, bouncing back from a slight dip in
the previous session, as rising raw material prices and
production cuts in China provided end-of-year support to the
market.
    Producers of alumina in northern China have been affected by
an escalating natural gas shortage in the region, pushing up the
price of the substance, which is used by smelters to make
aluminium.
    The revival in Shanghai aluminium prices, following a 17.5
percent plunge from Sept. 21 as winter curbs on Chinese smelters
underwhelmed, "is because of the alumina price rebound, which is
in turn driven by the gas price surge," said Helen Lau, an
analyst at Argonaut Securities in Hong Kong.
    "Given the rising gas price, fuel cost may account for a
higher percentage than the normal 30 percent" of alumina
production costs, she added.
             
    FUNDAMENTALS
    * SHFE ALUMINIUM: The most-traded February contract in
Shanghai closed up 1.4 percent at 14,685 yuan 
($2,228.38) per tonne, registering its fourth gain in five days
after data out last week showed a hefty drop in China's November
aluminium output.
    * ALUMINA: A unit of State Power Investment Corp           
in China's Shanxi province will cut its alumina output by
50,000-60,000 tonnes this month due to gas shortages, a company
source told Reuters on Tuesday.
    * LME ALUMINIUM: Three-month aluminium on the London Metal
Exchange was down 0.2 percent at $2,094 a tonne by 0713
GMT, having touched a three-week peak on Tuesday.
    * COPPER: The most-traded February copper contract on the
ShFE closed up 0.2 percent at 53,680 yuan a tonne,
while copper on the LME was flat at $6,942.50 a tonne.
    * OTHER METALS: Zinc and nickel clocked
gains of around half a percent on the ShFE amid signs of
improving demand. Lead, the only loser in Shanghai,
ended down 0.1 percent but was up 0.5 percent in London.   
    * UNITED STATES: U.S. President Donald Trump's new security
strategy bolsters the case for trade actions to protect U.S.
economic interests on national security grounds, including
possible import tariffs on steel and aluminium, a senior Trump
administration official said on Tuesday.
    * BHP: Global miner BHP Billiton, said on
Tuesday it had taken a preliminary decision to leave the World
Coal Association (WCA) over differences on climate change and
might also withdraw from the U.S. Chamber of Commerce.

    * COLUMN: Threat of strikes looms large for copper supply in
2018: Andy Home
    
    * For the top stories in metals and other news, click       
 or     
           
    
    MARKETS NEWS
    * Asian shares edged up slightly on Wednesday, shrugging off
Wall Street's losses as the long-awaited U.S. tax reform bill
wound its way through Congress, while higher Treasury yields
underpinned the dollar.    
    
       
        
    PRICES    
  
 BASE METALS PRICES                        0713 GMT
 Three month LME copper                        6945
 Most active ShFE copper                      53670
 Three month LME aluminium                     2094
 Most active ShFE aluminium                   14685
 Three month LME zinc                        3219.5
 Most active ShFE zinc                        25535
 Three month LME lead                          2559
 Most active ShFE lead                        19330
 Three month LME nickel                       11820
 Most active ShFE nickel                      95110
 Three month LME tin                          19385
 Most active ShFE tin                        137910
                                                   
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER               LMESHFCUc3    339.55
 LME/SHFE ALUMINIUM            LMESHFALc3  -1335.74
                                           
 LME/SHFE ZINC                 LMESHFZNc3    388.14
 LME/SHFE LEAD                 LMESHFPBc3   -1075.2
 LME/SHFE NICKEL               LMESHFNIc3   2321.07
                                           
 
    

($1 = 6.5900 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; Editing by Sunil Nair and Vyas Mohan)
  
 
 
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