December 30, 2019 / 5:41 AM / 21 days ago

METALS-London aluminium drops as Hydro restarts Brazil operations; tin sinks

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, Dec 30 (Reuters) - London aluminium prices fell on
Monday, heading for their first  drop in seven sessions after
Norsk Hydro said it had resumed bauxite production in
Brazil and was ramping up alumina output, while tin hit a more
than two-week low.     
    Bauxite is a rock refined to make alumina, which is then
used to produce aluminium metal. A power outage earlier this
month had affected production at Hydro's Paragominas mine and
Alunorte alumina refinery, supporting aluminium prices.
    An acceleration in aluminium processing ahead of the
week-long Lunar New year holiday in China, the world's top
producer and consumer of the metal, in late-January is already
coming to an end, Jinrui Futures said in a note, adding that
environmental curbs were also affecting downstream demand.
    "Consumption will gradually decline, while the trend of
supply growth remains unchanged," the Chinese brokerage wrote,
noting that new projects such as Henan Shenhuo's smelter in
Yunnan were about to come on line.    
    
    
    FUNDAMENTALS
    * ALUMINIUM: Three-month aluminium on the London Metal
Exchange fell 0.4% to $1,817.50 by 0723 GMT after
closing up 0.6% on Friday. The most traded February aluminium
contract on the Shanghai Futures Exchange closed up
0.2% at 14,090 yuan a tonne by the end of the morning session as
ShFE stocks continue to fall.  
    * ALUMINIUM: Premiums for aluminium shipments to Japan for
the first quarter of 2020 were set at $83 per tonne, down 14%
from the previous quarter amid soft demand from electronics and
auto companies, two sources directly involved in the pricing
talks said.
    * CHINA: China's central bank will use the loan prime rate
(LPR) as a new benchmark for pricing existing floating-rate
loans, in a step that analysts say could help lower borrowing
costs and underpin economic growth.
    * TIN: ShFE tin prices fell as much as 3.8% in
Friday's night session to 133,000 yuan a tonne, the lowest since
Nov. 20, after Shanghai tin stocks rose by almost one-third to
5,351 tonnes, but recovered to close down 1.4% on 136,360 yuan.
LME tin slid for a fifth day, losing as much as 1.2% to
$16,920 a tonne, its lowest since Dec. 12.
    * OTHER METALS: LME copper rose 0.4% to $6,237.50 a
tonne in holiday-thinned trade, while ShFE copper closed down
0.4% at 49,510 yuan a tonne. London zinc added 0.5%,
while nickel climbed 0.3% and lead lost 0.2%.
     
    MARKETS
    A broad gauge of Asian share markets rose to an 18-month
high on Monday as Chinese equities gained.          
 
    PRICES       
 BASE METALS PRICES                       0727 GMT
 Three month LME copper                     6237.5
 Most active ShFE copper                     49510
 Three month LME aluminium                    1817
 Most active ShFE aluminium                  14085
 Three month LME zinc                       2317.5
 Most active ShFE zinc                       18095
 Three month LME lead                       1935.5
 Most active ShFE lead                       15180
 Three month LME nickel                      14255
 Most active ShFE nickel                    111700
 Three month LME tin                         17000
 Most active ShFE tin                       136290
                                                  
 BASE METALS ARBITRAGE                            
 LME/SHFE COPPER              LMESHFCUc      441.8
                              3          
 LME/SHFE ALUMINIUM           LMESHFALc    -336.53
                              3          
 LME/SHFE ZINC                LMESHFZNc    -434.68
                              3          
 LME/SHFE LEAD                LMESHFPBc    -553.45
                              3          
 LME/SHFE NICKEL              LMESHFNIc    -2798.3
                              3          
 ($1 = 6.9825 Chinese yuan)

 (Reporting by Tom Daly; Editing by Shailesh Kuber and
Uttaresh.V)
  
 
 
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