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METALS-London zinc, nickel stretch rally on steel gains
August 21, 2017 / 5:46 AM / 3 months ago

METALS-London zinc, nickel stretch rally on steel gains

 (Adds detail, updates prices)
    By Melanie Burton
    MELBOURNE, Aug 21 (Reuters) - London zinc rose to its
highest price in a decade on Monday and nickel also rallied as
investors ploughed into metals used by China's steel sector,
seeing robust demand even as capacity is constrained by
Beijing's drive for industry reform.
    "Metals are pretty strong. The USD has been weaker and the
Federal Reserve has turned a bit more dovish so that is 
supportive," said analyst Lachlan Shaw of UBS in Melbourne.
    Shaw noted that China's steel and aluminium markets could
tighten with central government mandated cuts over the winter,
as Beijing acts to clear its skies, although the aluminium cuts
should be offset by rising Shanghai warehouse inventories. 
    "Closing old and inefficient steel capacity in the 26 + 2
cities is set to cut production by 50 percent and aluminum by 30
percent, before mills and smelters elsewhere in China lift
output to compensate," he said.
   "(This)... is driving positive sentiment right now."
   
    FUNDAMENTALS
    * LME ZINC: London Metal Exchange (LME) zinc hit the
highest since October 2007 at $3,180.50 a tonne. Prices were up
0.8 percent at $3,150 at 0700 GMT. LME nickel, used in
the stainless steel sector, rallied by 1.7 percent, touching its
highest price this year.
    * LME COPPER: LME copper rallied 1 percent, having
earlier struck $6,593 a tonne, the highest since Nov. 2014.
    * CHINA STEEL: China's iron ore futures rose for a third day
on Monday, soaring more than 6 percent, fuelled by concerns of
shortages of high-grade iron ore and before curbs on futures
purchases come into force.
    * SHFE: Shanghai Futures Exchange copper showed 1.5
 percent gains. SHFE nickel rallied 3.9 percent while
SHFE zinc ended up 1.7 percent. 
    * JAPAN: Confidence at Japanese manufacturers rose to its
highest level in a decade in August led by materials producers,
a Reuters poll showed, a further sign of broadening recovery in
the economy.
    * ALUMINIUM: Cash aluminium has soared against the benchmark
contract, reflecting a rush on immediate supply. Cash aluminium
traded at a $9.50 premium against the benchmark, up from a $21
discount in early August. CMAL0-3
    * CHALCO: The president of Aluminum Corp of China (Chalco)
 said that it had increased aluminium production in
the first half of 2017 to take advantage of capacity cuts by
private rivals, and would continue to raise production in the
second half.
    * COPPER: Limited access to the giant Grasberg copper mine
in eastern Indonesia is expected to resume on Monday, its
operator said
    * COPPER: Protesters in Peru have removed barriers on a road
used by MMG Ltd to move its copper concentrate from
its Las Bambas mine to port for shipping.
    * COMEX: Speculators in Comex copper boosted their record
long position in the latest week, regulatory data showed.  

    * AFGHANISTAN: U.S. President Donald Trump is eyeing
Afghanistan's mineral wealth to help pay for a 16-year war and
reconstruction efforts that have already cost $117 billion.

    PRICES    
 BASE METALS PRICES               0705 gmt               
 Three month LME copper                            6544.5
 Most active ShFE copper                            51640
 Three month LME aluminium                           2079
 Most active ShFE aluminium                         16425
 Three month LME zinc                                3152
 Most active ShFE zinc                              26390
 Three month LME lead                                2386
 Most active ShFE lead                              19630
 Three month LME nickel                             11185
 Most active ShFE nickel                            91030
 Three month LME tin                                20340
 Most active ShFE tin                              144700
                                                         
 BASE METALS ARBITRAGE                                   
 LME/SHFE COPPER             LMESHFCUc3            667.47
 LME/SHFE ALUMINIUM          LMESHFALc3            317.55
 LME/SHFE ZINC               LMESHFZNc3           1172.45
 LME/SHFE LEAD               LMESHFPBc3            343.53
 LME/SHFE NICKEL             LMESHFNIc3           1690.53
 
    
 (Reporting by Melanie Burton; Editing by Kenneth Maxwell and
Richard Pullin)
  
 
 

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