* LME/ShFE arb: tmsnrt.rs/2oQ5nm2
* LME aluminium stocks down more than 30 percent since Jan
* Oil price climbs above $52 a barrel
(Adds closing prices)
By Pratima Desai
LONDON, May 15 Aluminium prices rose to a
one-week high on Monday as the market focused on the potential
for output cuts in top producer China and higher oil prices.
Benchmark aluminium on the London Metal Exchange
ended 0.8 percent up at $1,905.5 a tonne, having touched
$1,911.50, its highest since May 5.
"If the cuts are as draconian as some of the bulls would
have you believe, then yes it can make a difference," said
Societe Generale analyst Robin Bhar. "We could see a more
balanced market in China and lower exports to the rest of the
SMOG: China has ordered aluminium producers in 28 cities to
cut output during the winter and outlined plans to curb coal use
in the capital in its battle against smog.
OUTPUT: China accounts for more than half of global
aluminium production estimated at about 59 million tonnes last
OIL: Crude oil rose above $52 a barrel for the first time
since April after Saudi Arabia and Russia said that OPEC-led
output cuts need to be extended for a further nine months until
COSTS: Higher energy costs raise the floor for prices of
aluminium, where power can account for 25-40 percent of
INVENTORIES: Prices are also supported by tumbling stocks of
aluminium in LME-approved warehouses, with inventories down more
than 30 percent since mid-January at about 1.4 million tonnes.
POSITION: Reinforcing nervousness about a tight LME market
is a large position holding between 40 percent and 49 percent of
aluminium cash contracts and warrants. MALSTX-TOTAL
SILK ROAD: Traders said that China's trillion-dollar effort
to build a modern Silk Road with ports, roads and rail links had
boosted sentiment in metals markets.
DOLLAR: Support for base metals also came from a weaker U.S.
currency, which makes dollar-denominated metals cheaper for
non-U.S. companies, potentially boosting demand.
DATA: Gains are expected to be capped by weak Chinese
industrial production and investment data for April.
PREMIUM: Concern about nearby supplies on the LME market
pushed the premium for tin cash over the three-month contract to
a five-month high at $170 a tonne MSN0-3. Benchmark tin
closed wih a 0.2 percent gain at $19,875.
STOCKS: Stocks of tin in LME warehouses, at 2,300 tonnes,
are near their lowest since 1989. The tightness is reinforced by
one entity holding between 50 percent and 79 percent of cash
contracts and warrant holdings. MSNSTX-TOTAL
PRICES: Copper climbed 1 percent to $5,613 a tonne,
zinc rose 0.7 percent to $2,571, lead was up 0.4
percent at $2,135 and nickel slipped by 1 percent to
(Editing by David Evans and David Goodman)