March 13, 2018 / 4:06 AM / 6 months ago

METALS-Shanghai aluminium slips to lowest since Dec 2016 on oversupply fears

 (adds analyst comment, updates prices)
    BEIJING, March 13 (Reuters) - Shanghai aluminium prices fell
more than 2 percent on Tuesday, slipping below the 14,000 yuan
($2,213) a tonne mark for the first time since late 2016, just
two days before winter output restrictions on Chinese smelters
are due to be lifted.
    China ordered smelters in 28 northern cities to cut
aluminium output by at least 30 percent from mid-November to
mid-March as part of an anti-pollution campaign.
    Argonaut Securities analyst Helen Lau said the March 15
restart had already been priced in, but new smelting capacity in
China was adding even more supply to the market. 
    "I'm sure a lot of these new smelters are keen to increase
their production to full capacity as early as possible," Lau
said, looking to recover their investment, even at low prices.
    The new plants may be able to break even below 14,000 yuan a
tonne, she added. Many Chinese smelters are losing money at
current price levels, industry sources say.
        
    FUNDAMENTALS
    * SHFE ALUMINIUM: The most traded May aluminium contract
 on the Shanghai Futures Exchange (ShFE) was down 2.1
percent at 13,835 yuan at 0344 GMT. It earlier touched 13,820 a
tonne, its lowest since Dec. 26, 2016.
    * LME ALUMINIUM: Three-month aluminium on the London
Metal Exchange (LME) edged up 0.1 percent to $2,092.50 a tonne,
after closing down 1.4 percent in the previous session, its
lowest in almost three months.
    * COPPER: Three-month copper on the LME edged down
0.1 percent to $6,907.50 a tonne and ShFE copper fell
0.4 percent to 51,840 yuan a tonne.
    * CHINA MINISTRIES: Top metals consumer China said it will
merge its banking and insurance regulators and create a new
agricultural and rural village ministry, a parliament document
released on Tuesday showed, in the biggest ministry shake-up in
years.
    * CANADA: Canadian Prime Minister Justin Trudeau promised
aluminum and steelworkers on Monday he would defend them against
possible U.S. tariffs and called U.S. President Donald Trump to
stress that "mutually beneficial" cross-border supply chains
should be preserved.
    * JAPAN: Some Japanese aluminium buyers have agreed to pay a
premium of $129 per tonne for shipments from global producers in
the April to June quarter, reflecting soaring U.S. spot
premiums, two sources directly involved in the pricing talks
said on Monday.
    For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian stocks stalled on Tuesday as Wall Street shares lost
steam, while the dollar sagged on the back of declining U.S.
yields.
       
        
    DATA AHEAD (GMT)
    1000  U.S.    NFIB business optimism index Feb
    1230  U.S.     Consumer prices Feb
    1500  U.S.        Cleveland Fed CPI Feb
    
    PRICES
    
                                          0344 GMT
 Three month LME copper                     6907.5
 Most active ShFE copper                     51840
 Three month LME aluminium                  2092.5
 Most active ShFE aluminium                  13830
 Three month LME zinc                         3258
 Most active ShFE zinc                       25105
 Three month LME lead                       2343.5
 Most active ShFE lead                       18175
 Three month LME nickel                      13705
 Most active ShFE nickel                    103960
 Three month LME tin                         21400
 Most active ShFE tin                       146360
                                                  
                                                  
 LME/SHFE COPPER              LMESHFCUc3   1008.91
 LME/SHFE ALUMINIUM           LMESHFALc3  -1537.26
                                          
 LME/SHFE ZINC                LMESHFZNc3    674.01
 LME/SHFE LEAD                LMESHFPBc3    146.77
 LME/SHFE NICKEL              LMESHFNIc3   1383.11
                                          
 


($1 = 6.3270 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; editing by Richard Pullin)
  
 
 
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