* LME/ShFE arb: bit.ly/2wZSAEz (Updates with closing prices)
By Eric Onstad
LONDON, Oct 10 (Reuters) - Copper prices reached their highest level in four weeks on Tuesday as speculators kept buying in response to expectations of potential shortages in China.
China announced plans in July and August to curb waste imports, including scrap metal, but it was unclear how severe the restrictions would be on copper.
“I think copper’s pricing in expectations of the Chinese restrictions on scrap imports, but to me the price looks a little high based on current fundamentals,” Colin Hamilton, director of commodities research at BMO Capital Markets, said.
Benchmark copper on the London Metal Exchange closed up 1.4 percent at $6,760 a tonne, the highest since Sept. 11.
CONGO: Helping to lift copper was news that Congo’s mines minister has ordered a joint venture of Chinese investors to stop exporting raw copper and cobalt before processing because of their low value on international markets.
FERROUS: Steel-linked metals zinc and nickel were initially pressured after Shanghai rebar steel futures slid nearly 5 percent, but both metals rebounded later in the session.
NICKEL: Three-month LME nickel, largely used to make stainless steel, finished 0.4 percent higher at $11,055 a tonne, the highest level since Sept. 21, bouncing after touching a low of $10,830.
ZINC: Mainly used in galvanising steel to make it rust resistant, zinc ended up 1.4 percent at $3,379 a tonne. It is one of the top LME performers this year, rallying 25 percent on worries of shortages due to mine closures and an environmental crackdown in China.
ZINC SUPPLY: Vedanta Resources boosted mined metal production at its Indian zinc unit by 42 percent in the first half of the year, highlighting the potential of more supply coming on the market.
ZINC SPREADS: Zinc was resilient partly because the premium of the cash contract over the three-month one touched a new high of $73 a tonne, the strongest since 2007, indicating short-term shortages.
DOMINANT POSITION: Zinc prices have also been bolstered by the large position held by one party, which controls 50-80 percent of available LME zinc inventories, according to LME data. <0#LME-WHL>
ALUMINIUM: Aluminium closed down 0.5 percent at $2,163 as investors feared pollution-linked shutdowns in China would be offset by new capacity.
“SMM (Shanghai Metals Market) reports that new China policy is giving the green light to some companies to build capacity in other provinces,” Alastair Munro at broker Marex Spectron said in a note.
PRICES: Lead climbed 1.8 percent to finish at $2,557 while tin fell 0.2 percent to $20,725.
Reporting by Eric Onstad; Editing by Jeremy Gaunt, Greg Mahlich