December 20, 2018 / 2:03 AM / 10 months ago

METALS-Aluminium hits 16-month low as U.S. withdraws Rusal sanctions

    BEIJING, Dec 20 (Reuters) - London aluminium prices sank to
a 16-month low in early Asian trade on Thursday after the United
States said it would withdraw sanctions on Russian aluminium
producer United Company Rusal.
    Most dollar-denomintaed metals, including copper, were
trading lower after the U.S. Federal Reserve on Wednesday raised
interest rates for the fourth time this year and signalled
further hikes ahead.
    Higher interest rates tend to push commodity prices lower,
because they mean higher borrowing costs, which can reduce
economic activity and consumption, as well as higher costs for
inventory financing.         
    * ALUMINIUM: Three-month aluminium on the London Metal
Exchange fell by as much as 1.1 percent to $1,905.50 a
tonne, the lowest since Aug. 4, 2017, and stood at $1,910 a
tonne as of 0144 GMT. The most-traded February alumnium contract
on the Shanghai Futures Exchange slipped by 0.4 percent
to 13,635 yuan ($1,974.37) a tonne. 
    * RUSAL: The Russian aluminium giant's Hong Kong shares
 rose as much as 26.8 percent to their highest since
April, the month when the sanctions were announced and sent
aluminium prices soaring on fears of a supply squeeze.
    * LME RESPONSE: The LME said it proposed to lift its
suspension on aluminium produced Rusal if U.S. sanctions are
    * ALUMINIUM: Representatives from China's biggest aluminium
producers will hold a meeting on Friday in the southern region
of Guangxi to discuss slumping demand and falling prices, three
sources familiar with the matter said.
    * OTHER METALS: LME copper slipped 0.2 percent to
$6,003.50 a tonne having gained 0.8 percent in the previous
session on hopes a pause in Fed rate hikes would boost demand.
ShFE copper fell by 0.3 percent.
    * FED: The U.S. Federal Reserve on Wednesday pushed its key
overnight lending rate to a range of 2.25 percent to 2.50
percent, the fourth hike of the year, and signalled "some
further gradual" increases.
    For the top stories in metals and other news, click       
    * Asian shares retreated on Thursday after the U.S. Federal
Reserve raised rates, as expected, and kept most of its guidance
for additional hikes next year, dashing investor hopes for a
more dovish policy outlook.    
 BASE METALS PRICES                        0142 GMT
 Three month LME copper                        6006
 Most active ShFE copper                      48270
 Three month LME aluminium                     1910
 Most active ShFE aluminium                   13635
 Three month LME zinc                          2542
 Most active ShFE zinc                        21090
 Three month LME lead                          1953
 Most active ShFE lead                        18475
 Three month LME nickel                       10915
 Most active ShFE nickel                      90030
 Three month LME tin                          19285
 Most active ShFE tin                        146570
 BASE METALS ARBITRAGE                             
 LME/SHFE COPPER             LMESHFCUc3      181.81
 LME/SHFE ALUMINIUM          LMESHFALc3     -1559.2
 LME/SHFE ZINC               LMESHFZNc3      228.09
 LME/SHFE LEAD               LMESHFPBc3     1582.63
 LME/SHFE NICKEL             LMESHFNIc3     1569.63

($1 = 6.9060 Chinese yuan)

 (Reporting by Tom Daly; Editing by Rashmi Aich)
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