October 4, 2018 / 2:34 AM / a year ago

METALS-Aluminium extends rally to 3-1/2-month peak on alumina shortage fears

 (Updates prices)
    By Manolo Serapio Jr
    MANILA, Oct 4 (Reuters) - Aluminium rose to its strongest in
more than three months on Thursday, stretching the rally to a
fifth session, amid worries the closure of the world's largest
alumina refinery in Brazil will lead to a shortage of the raw
    Norsk Hydro          said on Wednesday that it would halt
production indefinitely and lay off 4,700 people at Brazil's
Alunorte refinery, which has been operating at half capacity
since March due to an environmental dispute.             
    Three-month aluminium on the London Metal Exchange        
was up 1.7 percent at $2,242.50 a tonne, as of 0657 GMT, after
earlier hitting $2,254, the highest since June 15. 
    The metal surged 4.2 percent overnight, its largest
single-day gain since April.
    The shutdown of the Alunorte plant "will worsen the global
supply tightness as production resumption by refineries
elsewhere will take time to fill the void," Argonaut Securities
analyst Helen Lau said.
    "Therefore, we expect alumina prices to rise further."
    The global price of alumina         has increased nearly 13
percent this year to $460 a tonne. 
    LME aluminium is down 1 percent year-to-date.
    * ALUNORTE: Norsk Hydro's decision also triggered a shutdown
of its Paragominas bauxite mine, which supplies Alunorte, and
will lead to the imminent closure of the nearby Albras aluminium
    * ALUMINA PRODUCERS: Shares in Asia's alumina makers rose
after Norsk Hydro's announcement, with South 32          and
Alumina Ltd          posting steep gains.             
    * OTHER METALS: Copper         climbed 0.9 percent to $6,323
a tonne, zinc         added 0.8 percent to $2,672 and nickel
        jumped 1.4 percent to $12,945. 
    China's markets remain shut for the week-long National Day
    * CHINA COPPER DEMAND: China's overseas expansion will
spread over land that is home to more than half the world's
population, potentially boosting copper use by 1.6 million
tonnes, or roughly 7 percent of annual demand, said major miner
BHP                 .             
    * NICKEL DEMAND: Global demand for nickel is expected to
increase to 2.42 million tonnes in 2019 versus a projection of
2.35 million tonnes in 2018, the International Nickel Study
Group said.             
    * DOLLAR: The dollar touched an 11-month high against the
yen and stood tall against other peers, boosted by upbeat U.S.
economic data and hawkish comments from Federal Reserve Chairman
Jerome Powell.       
    Three month LME copper                  
    Most active ShFE copper                  
    Three month LME aluminium               
    Most active ShFE aluminium               
    Three month LME zinc                    
    Most active ShFE zinc                    
    Three month LME lead                    
    Most active ShFE lead                    
    Three month LME nickel                 
    Most active ShFE nickel                   
    Three month LME tin                     
    Most active ShFE tin                             

 (Reporting by Manolo Serapio Jr., Editing by Richard Pullin and
Sherry Jacob-Phillips)
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