August 17, 2017 / 5:59 AM / 3 years ago

METALS--Copper, aluminium, zinc rise to multi-year highs as China reforms curb supply

 (Adds detail, updates prices)
    By Melanie Burton
    MELBOURNE, Aug 17 (Reuters) - London copper, aluminium and
zinc rose to multi-year highs on Thursday, leading a broad-based
rally in metals, on expectations that China's reform of its
metals industry will curb supply against a background of robust
demand. 
    A weaker dollar and a robust Chinese property sector have
supported metals prices, said analyst Daniel Morgan of UBS in
Sydney.
    "People have been waiting for the property slowdown in China
to weigh on demand. We are squarely in the third quarter now and
that hasn't happened ... every month things are okay," he said. 
     "Overall, the space is pretty healthy. Miners are making
good money now and I think they should be expecting to for quite
a few months."    
    
    FUNDAMENTALS
    * LME COPPER: London Metal Exchange copper advanced
to its highest since Nov. 27, 2014 at $6,580 a tonne, before
paring gains to $6,556 a tonne, still up 0.4 percent and
extending the prior session's 2.4-percent rally. Copper prices
 are up 18 pct this year.
     * LME: LME aluminium climbed to its highest since
Sept 8, 2014, while zinc rose to it highest since Oct
16, 2007, at $3,147 a tonne. Both LME zinc and LME lead
held the prior day's 5-percent gains and all three metals are up
between 21 percent and 25 percent this year.    
     * SHFE: On the Shanghai Futures Exchange metals also
maintained their overnight rallies. ShFE zinc rose by
its limit of 6 percent and ShFE lead jumped 5 percent.
ShFE aluminium, nickel and copper
finished up around 3 percent.   
    * U.S. ECONOMY: U.S. homebuilding unexpectedly fell in July
as the construction of multi-family houses tumbled to a 10-month
low, but strong job growth is expected to continue to support
the housing market recovery.
    * U.S. DOLLAR: Prospects for a slower pace of interest rate
rises in the United States undermined the dollar and offered an
extra lift to metals.
    * CAPACITY CUTS: China's top steel-making province has
pledged to fulfil capacity cutting targets for this year in
steel, cement, coal and glass by the end of September, under
efforts to tackle air pollution ahead of winter, an environment
official said on Wednesday.     
    * ZINC: Chinese traders are diverting money from steel to
zinc on the Shanghai Futures Exchange after a hike in trading
fees on Monday cut the appeal of steel even as booming
construction activity fuels demand for steel-making essentials
like zinc.
    *COMING UP: U.S. industrial production for July at 1315 GMT 
    PRICES    
    
 BASE METALS PRICES                 0709 GMT            
 Three month LME copper                             6531
 Most active ShFE copper                           51450
 Three month LME aluminium                          2098
 Most active ShFE aluminium                        16515
 Three month LME zinc                               3132
 Most active ShFE zinc                             25975
 Three month LME lead                               2512
 Most active ShFE lead                             20365
 Three month LME nickel                            10805
 Most active ShFE nickel                           87940
 Three month LME tin                               20285
 Most active ShFE tin                             145470
                                                        
 BASE METALS ARBITRAGE                                  
 LME/SHFE COPPER               LMESHFCUc3         668.37
 LME/SHFE ALUMINIUM            LMESHFALc3         237.98
 LME/SHFE ZINC                 LMESHFZNc3        1024.54
 LME/SHFE LEAD                 LMESHFPBc3          82.88
 LME/SHFE NICKEL               LMESHFNIc3        1984.27
 
    
 (Reporting by Melanie Burton; Editing by Christian Schmollinger
and Joseph Radford)
  
 
 
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