February 19, 2019 / 5:01 AM / a year ago

METALS-Shanghai aluminium slips after Malaysia lifts bauxite ban

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Feb 19 (Reuters) - Shanghai aluminium prices fell
on Tuesday, after Malaysia said it would not extend a moratorium
on mining bauxite when it expires on March 31, potentially
reducing costs in the aluminium supply chain for top producer
China.
    Bauxite is a rock refined to make alumina, which is then
used to make aluminium metal. Chinese aluminium prices have been
struggling to move away from two-year lows amid weak domestic
demand and plentiful supply.
    "Not only is there a lack of fundamental support for the
aluminium market, the cost support from bauxite may start to
fade," Helen Lau, an analyst at Argonaut Securities, said in a
note, adding that in 2015, before the moratorium, Malaysia
accounted for over 40 percent of China's total imports.
    Australian bauxite prices SMM-BAUX-AUSTA spiked to a near
three-year high in January but have since eased.
    "Recently the increased exports from Guinea and ...
Australia have gradually taken the market share away from
Malaysia. That said, Malaysia may still be a potential threat
... due to its proximity to China," Lau added.
                   
    FUNDAMENTALS
    * SHFE ALUMINIUM: The most traded aluminium contract
 on the Shanghai Futures Exchange ended down 0.2 percent
at 13,430 yuan ($1,981.76) a tonne. Three-month aluminium on the
London Metal Exchange was up 0.1 percent at $1,858 a
tonne as of 0704 GMT.
    * ALUMINIUM: Mining giant Glencore has bought 200,000 tonnes
of aluminium on the LME and will take delivery of the metal from
warehouses owned by ISTIM UK in Port Klang, Malaysia, five
sources familiar with the matter said.
    * COPPER: Three-month LME copper edged down 0.3
percent to $6,258 a tonne, on course to snap a run of four
straight daily gains on optimism over U.S.-China trade talks.
ShFE copper closed up 1.1 percent, tracking Monday's
jump in the LME price, which was also driven by supply concerns.
    * BHP: The world's biggest miner BHP Group said on
Tuesday its first-half profit fell 8 percent as copper earnings
slumped because of declining ore quality at its Escondida mine
and a number of production outages globally.
    * TRADE: Chinese Vice Premier Liu He will visit Washington
on Thursday and Friday to continue trade negotiations with the
United States, China's Commerce Ministry said.
    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian shares hovered near four-month highs as investors
took heart from some progress in Sino-U.S. trade talks, while
the yen slipped as the Japanese central bank said it won't rule
out further policy easing.    
    
    PRICES        
 BASE METALS PRICES                       0712 GMT
 Three month LME copper                     6262.5
 Most active ShFE copper                     49360
 Three month LME aluminium                    1857
 Most active ShFE aluminium                  13425
 Three month LME zinc                         2635
 Most active ShFE zinc                       21540
 Three month LME lead                       2029.5
 Most active ShFE lead                       16830
 Three month LME nickel                      12440
 Most active ShFE nickel                     99150
 Three month LME tin                         21175
 Most active ShFE tin                       150680
                                                  
 BASE METALS ARBITRAGE                            
 LME/SHFE COPPER              LMESHFCUc3    -52.83
 LME/SHFE ALUMINIUM           LMESHFALc3  -1172.38
                                          
 LME/SHFE ZINC                LMESHFZNc3    179.85
 LME/SHFE LEAD                LMESHFPBc3    369.01
 LME/SHFE NICKEL              LMESHFNIc3       204
                                          
 

($1 = 6.7768 Chinese yuan renminbi)

    
 (Reporting by Tom Daly; editing by Richard Pullin and Shreejay
Sinha)
  
 
 
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