(In May 11 item, corrects first paragraph to say ‘second-largest’ aluminium producer, not largest; also corrects milestone in second paragraph to 7-year high from 9-year high)
* LME/ShFE arb: bit.ly/2wZSAEz
* GRAPHIC-2018 asset returns: tmsnrt.rs/2jvdmXl
By Zandi Shabalala
LONDON, May 11 (Reuters) - Aluminium fell to its lowest in a week on Friday and ended the week in negative territory as the market corrected after a recent price surge on U.S. sanctions against the world’s second-largest producer and its major shareholder.
Benchmark aluminium on the London Metal Exchange slipped 2 percent to $2,288 a tonne, its lowest since May 3. The price in the light metal rallied to a seven-year high last month.
Washington last month announced sanctions on Russian billionaire Oleg Deripaska and several companies in which he is a large shareholder, including Rusal.
“It’s a continued correction from the multi-month high we have seen in April,” said Commerzbank analyst Daniel Briesemann, adding the aluminium price reaction to U.S. sanctions had been exaggerated.
“The news will dictate the price. However, over the next few weeks or month I would definitely say the correction would continue.”
U.S. SANCTIONS: Glencore and United Company Rusal have asked the London Metal Exchange to temporarily lift its suspension on Rusal’s aluminium after an extension of the deadline for companies to wind down contracts with the Russian firm under U.S. sanctions, sources said.
RUSAL: Russian aluminium giant Rusal on Friday warned of expected harm to its business from U.S. sanctions, sending its share price lower despite the company reporting a 20 percent jump in first-quarter core profit.
STOCKS: On-warrant stocks in aluminium - those not earmarked for delivery - fell by 3,250 tonnes to 860,700 tonnes. They have shed 18 percent since April 16 to the lowest levels since early February, while headline stocks are down 11 percent.
CHINA LENDING: Chinese banks extended 1.18 trillion yuan ($186.4 billion) in net new yuan loans in April, up slightly from March and higher than expected, as policymakers look to support the economy in the face of fresh risks from U.S. trade threats.
Signs of more lending in China, the world’s top consumer of metals, should generally support prices.
EGA: Emirates Global Aluminium’s stock market listing is likely to slip to 2019 because of turmoil in global aluminium markets after the U.S. sanctions on Rusal, three sources familiar with the deal said.
JAPAN SUPPLY: Japanese copper miners JX Nippon Mining & Metals and Sumitomo Metal Mining plan to increase output from their mines in Chile this year but face challenges in bringing them to full capacity and meeting profit targets.
INDONESIA: Indonesia’s ministry of energy and mineral resources has issued a decree requiring special mining permit holders producing for at least five years to divest 51 percent to Indonesian entities by 2019.
PRICES: Copper ended 0.3 percent lower at $6,940 a tonne, lead finished 1.7 percent down at $2,345, tin added 0.8 percent to $21,000, zinc was flat at$3,085 and nickel rose 1.3 percent to $14,055.
Additional reporting by Tom Daly; Editing by David Goodman and Mark Potter