November 30, 2017 / 4:02 AM / 2 years ago

METALS-Base metals drop in Nov despite signs of China factory growth

 (Adds details, updates prices)
    By Melanie Burton
    MELBOURNE, Nov 30 (Reuters) - Base metals declined on
Thursday and looked to finish November lower, shrugging off
encouraging manufacturing reports from China and Japan as
investors locked in profits before year end. 
    Most base metals have corrected this month after prices
overshot fundamentals, but are still set for a second year of
solid gains as global manufacturing growth recovers following
the financial crisis.
    Nickel prices have dropped 8 percent this month as
exuberance over demand from electric vehicles fades while
pollution-related production cuts in China have proven less
fierce than feared which has sent zinc and aluminium down by
around 5 percent.    
     "It could just be a little profit-taking. There's been a
bit of an unwind in some of the metals positions in the past
month to six weeks," said UBS analyst Lachlan Shaw in Melbourne.
    "The aluminium long has definitely been unwound as the China
winter cuts, which were expected to tighten the market, came
through with a bit more wiggle room. The tension there has
certainly dissipated."
    
    FUNDAMENTALS
    * ALUMINIUM: London Metal Exchange (LME) aluminium
slipped as much as 1.2 percent to $2,040 per tonne, its lowest
since Aug. 15, before paring losses to 0.4 percent. 
    The metal is set to fall 5 percent in November, its biggest
monthly loss since May 2016. This has taken some heat out of the
year's 22 percent rally, which is still its biggest since 2009
when prices surged 46 percent. 
    Shanghai Futures Exchange (ShFE) aluminium plunged
more than 11 percent this month.
    * COPPER: LME copper was flat at $6,758 a tonne, as
of 0732 GMT. Earlier in the session, it hit $6,720 a tonne, the
weakest since Nov. 17. ShFE copper slipped 0.6 percent
to 52,840 yuan ($7,993) a tonne. 
    * CHINA PMI: Growth in China's manufacturing sector
unexpectedly picked up in November, despite a crackdown on air
pollution and a cooling property market that have been widely
expected to weigh on the world's second-largest economy.

    * JAPAN ECONOMY: Japan's industrial output rose less than
expected in October, but companies forecast production to rise
strongly in November and December as robust overseas demand
continues to support factory activity and broader economic
growth.
    * STRIKES: Workers at Southern Copper Corp in Peru
said they completed a ninth day of an indefinite strike on
Wednesday.
    * STRIKES: A union at Teck Resources' Quebrada Blanca copper
mine on Wednesday rejected a contract offer from the Canadian
miner, increasing the likelihood of a strike, the union told
Reuters.
    * MARKETS: Asian shares fell on Thursday, weighed down by a
plunge in high-flying tech shares on fears that a long boom in
micro-chips may have peaked, while virtual currency bitcoin
steadied after a roller-coaster ride in the previous session. 
    
               
 BASE METALS PRICES                  0729 GMT           
 Three month LME copper                             6758
 Most active ShFE copper                           52830
 Three month LME aluminium                        2060.5
 Most active ShFE aluminium                        14565
 Three month LME zinc                             3141.5
 Most active ShFE zinc                             24960
 Three month LME lead                               2446
 Most active ShFE lead                             18365
 Three month LME nickel                            11295
 Most active ShFE nickel                           91060
 Three month LME tin                               19450
 Most active ShFE tin                             141510
                                                        
 BASE METALS ARBITRAGE                                  
 LME/SHFE COPPER               LMESHFCUc3         627.18
 LME/SHFE ALUMINIUM            LMESHFALc3       -1088.17
 LME/SHFE ZINC                 LMESHFZNc3         321.24
 LME/SHFE LEAD                 LMESHFPBc3       -1123.73
 LME/SHFE NICKEL               LMESHFNIc3           2114
 
    ($1 = 6.6110 Chinese yuan)

    
 (Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips
and Christian Schmollinger)
  
 
 
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