* LME/ShFE arb: bit.ly/2wZSAEz
* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl (Adds closing prices, ShFE stocks)
By Zandi Shabalala
LONDON, March 28 (Reuters) - Aluminium prices hit their lowest level in more than three months on Wednesday as the dollar firmed and concerns lingered that output cuts in China had not made as big of a dent on supply as expected.
Benchmark aluminium ended 0.9 percent lower at $2,027 per tonne, after touching its lowest since Dec. 14 at $2,018.75.
The metal used in goods from kitchen utensils to aeroplane parts is down more than 10 percent so far this year as capacity from top producer China resumes following widespread shutdowns over the winter.
“Throughout that whole period when we supposedly had these capacity cuts, inventories continued to increase, so was all production actually being reported or was there some unreported production that was not accounted for,” said ING Commodities Strategist Warren Patterson.
“The big question mark was around the quality of Chinese data and we can look again at ShFE inventory numbers,” he said.
HEATING SEASON ENDS: China’s winter heating season ended on March 15 after Beijing ordered smelters in 28 of its smoggiest northern cities to cut output by 30 percent from mid-November to mid-March. However, the actual volume cut was below expectations, putting pressure on prices.
ALUMINIUM STOCKS: On-warrant LME inventories of aluminium MALSTX-TOTAL, those not earmarked for delivery and therefore available to the market, shed 3.4 percent or 35,025 tonnes to 996,500 tonnes.
Meanwhile, ShFE aluminium AL-STX-SGH stockpiles held at exchange warehouses touched record highs at 940,318 tonnes, according to exchange data from Friday.
TARIFFS: China will soon announce a list of retaliatory tariffs on U.S. exports to China to counter an expected announcement from Washington of proposed new tariffs on Chinese imports, the state-run Global Times said Wednesday.
DOLLAR: Selling of industrial metals was reinforced by a firmer U.S. currency, which when it rises makes dollar-denominated commodities more expensive for holders of other currencies, potentially weighing on demand.
COPPER: Benchmark copper was down 0.2 percent at $6,665 a tonne. Total stocks on the LME rose 4,200 tonnes to 388,175 tonnes. Inventories on ShFE rose to levels not seen since April 2017, at 307,435 tonnes.
SPREADS: The rise in copper inventories has seen the discount of LME cash copper to the three-month contract CMCU0-3 reach $42.50 tonnes, close to January levels. OTHER METALS: Zinc added 0.3 percent to $3,284 per tonne; lead added 0.8 percent to $2,425; tin was flat at $20,890; while nickel added 1 percent to $13,130. (Additional reporting by Tom Daly Editing by Susan Fenton and Edmund Blair)