July 23, 2018 / 10:53 AM / 2 years ago

METALS-Aluminium bounces on short-covering after Rusal news

 (Updates with closing prices)
    By Eric Onstad
    LONDON, July 23 (Reuters) - Aluminium rebounded on Monday as
investors bought back bearish positions after a U.S. official
raised the prospect of lifting sanctions on Russia's Rusal.
    Cancelling sanctions on Rusal, the world's biggest aluminium
producer outside of China, would ease fears of a supply
shortage. However, some investors who had placed short positions
in expectation of sanctions being lifted were now liquidating
them, said Julius Baer analyst Carsten Menke.
    "For aluminium, it's probably sell the rumour, buy the
fact," Menke said.
    Some consumer buying was also seen, Marex Spectron's
Alastair Munro said in a note. 
    U.S. Treasury Secretary Steven Mnuchin told Reuters the
Treasury was open to removing Rusal           from a U.S.
sanctions list, adding that the objective was "not to put Rusal
out of business".             
    Three-month aluminium         was the biggest gainer on the
London Metal Exchange, climbing 2 percent in closing open-outcry
trading to $2,069 a tonne.
    Aluminium soared to a seven-year peak of $2,718 in April
after sanctions were slapped on Rusal, but prices tumbled after
the United States initially said there was potential for the
sanctions to be lifted.
    Prices lost further ground over the past two months on
worries of weaker demand because of trade tensions and a
slowdown in top metals consumer China.        
    * ALUMINIUM INVENTORIES: On-warrant LME aluminium
inventories MALSTX-TOTAL -- those not earmarked for delivery
-- slid by 30,275 tonnes to 1,011,725 on Friday, data showed.  
    * ZINC: LME zinc         slipped 0.8 percent to end at
$2,555 a tonne. LME data showed a large short in August futures,
while a single holder controlled more than half of LME
inventories. <0#LME-FBR>  <0#LME-WHL>
    * ZINC STOCKS: LME zinc inventories MZNSTX-TOTAL rose by
17,200 tonnes to 250,400 on Friday, LME data showed.
    * COPPER: LME copper         fell 0.3 percent to finish
at$6,130 a tonne. Last week prices fell for a sixth week in a
row, hitting their lowest in a year at $5,988. 
    * STRIKES: Labour negotiations at Chile's Escondida copper
mine, the world's largest, are deadlocked without signs of
progress toward an agreement a little more than a week before
the current contract expires.              
    * SCRAP: China's June scrap copper imports dropped by 39.8
percent year on year to 200,000 tonnes, Chinese customs data
    * PRICES: Nickel         closed down 1 percent at $13,400 a
tonne, lead         dipped 0.1 percent to $2,134 and tin
       , untraded in closing rings, was bid down 0.1 percent at

 (Additional reporting by Melanie Burton in Melbourne
Editing by David Goodman and Jason Neely)
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