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METALS-Shanghai copper slips on virus worries; aluminium shines

(Updates prices)

Nov 18 (Reuters) - Chinese copper futures slipped on Wednesday as concerns grew over rising COVID-19 cases worldwide that have prompted fresh lockdowns in the United States and Europe, but losses were capped by supply-side worry.

Aluminium extended gains with the Chinese benchmark contract scaling a three-year high while London prices hit their highest in nearly two years supported by expectations of a supply crunch in the world’s top metals consumer.

The most-traded copper contract on the Shanghai Futures Exchange closed 0.3% lower at 52,950 yuan ($8,090.52) a tonne, after four consecutive sessions of gains.

Benchmark copper on the London Metal Exchange gained 0.9% to $7,132 a tonne by 0738 GMT, recouping early losses.

The metal hit a 29-month high on Monday as upbeat October factory output data in China reinforced views of solid demand.

“Investors viewed the move in copper to be overdone as the level of restrictions in Europe and the US increases,” said Daniel Hynes, senior commodity strategist at ANZ.

In the United States, several governors restricted gatherings to confront a coronavirus surge that they warned has become out of control.

FUNDAMENTALS

* China is launching a yuan-denominated copper futures contract this week that will be open to foreign traders, moving to wrest some pricing power away from the LME benchmark.

* Work stoppage will continue at Chile’s Candelaria copper mine after one of the unions on strike rejected a contract offer from the company.

* The Shanghai exchange will lower margin requirement for its nickel futures contract to 8% from 10% from the settlement on Nov. 20.

* Shanghai aluminium jumped 2.6% to 15,785 yuan a tonne, while LME aluminium rose as much as 0.7% to $1,991 a tonne, its highest since Dec. 3, 2018.

* Zinc rose more than 2%, but nickel fell. (Reporting by Enrico Dela Cruz in Manila; Editing by Rashmi Aich and Louise Heavens)

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