June 29, 2018 / 5:47 AM / 17 days ago

METALS-Zinc pares losses but still set for worst quarter since 2015

 (Adds Shanghai closing prices, updates London prices)
    BEIJING, June 29 (Reuters) - Zinc shrugged off early losses
to trade higher for a third day on Friday on the prospect of
Chinese smelters cutting output by 10 percent in response to low
prices and treatment charges. 
    Helen Lau, an analyst at Argonaut Securities in Hong Kong,
said a 10 percent cut implied that 400,000 tonnes of the metal
would come out of the market in China, the world's biggest zinc
producer, on an annualised basis.
    There is "a need for smelters to constrain their production
because demand is weak, especially the demand from galvanising,"
she added. Zinc is used to galvanise steel. 
    The metal shed 5.4 percent in Shanghai in the second quarter
and is on course to drop by around 11.5 percent in London over
the period, which would mark its worst quarter since the third
quarter of 2015. LME zinc is also set for a fall of 6.5 percent
in June alone, its steepest monthly plunge since November 2015.
      
   FUNDAMENTALS
    * ZINC: Zinc on the London Metal Exchange was up 0.1
at percent at $2,900.50 a tonne as of 0719 GMT. The most traded
August zinc contract on the Shanghai Futures Exchange
(ShFE) closed up 0.3 percent at 23,305 yuan ($3,520.87) a tonne.
    * COPPER: Three-month copper on the LME rose 0.8
percent to $6,676 a tonne and is on track for a 0.5 percent dip
this quarter. ShFE copper closed down 0.2 percent but
still posted a 1.8 percent gain over the three months.
    * OTHER METALS: Shanghai nickel saw its best
quarter since the contract was launched in 2015, with an 18.2
percent rise, while lead added 15.9 percent over the
quarter amid an environmental crackdown in China. 
    * TC/RCs: China's top copper smelters on Thursday failed to
set minimum treatment and refining charges (TC/RCs) for copper
concentrate in the third quarter of 2018, two people with
knowledge of the matter said.
    * RUSAL: Shareholders at sanctions-hit Russian aluminium
producer Rusal elected a new board of directors on
Thursday in an effort to appease the U.S. and get the
restrictions lifted.
    * For the top stories in metals and other news, click       
 or     
        
    MARKETS NEWS    
    * Asian share markets rallied from nine-month lows on Friday
as Chinese shares rebounded from a sell-off, but the market
outlook remains gloomy a week before initial U.S. and Chinese
tariffs are set to take effect.    
               
    PRICES
 BASE METALS PRICES                         0719 GMT
 Three month LME copper                       6678.5
 Most active ShFE copper                       51650
 Three month LME aluminium                      2159
 Most active ShFE aluminium                    14165
 Three month LME zinc                           2900
 Most active ShFE zinc                         23300
 Three month LME lead                         2421.5
 Most active ShFE lead                         20450
 Three month LME nickel                        15005
 Most active ShFE nickel                      117680
 Three month LME tin                           19735
 Most active ShFE tin                         144210
                                                    
 BASE METALS ARBITRAGE                              
 LME/SHFE COPPER              LMESHFCUc3       152.2
 LME/SHFE ALUMINIUM           LMESHFALc3       -2450
 LME/SHFE ZINC                LMESHFZNc3      433.79
 LME/SHFE LEAD                LMESHFPBc3      624.05
 LME/SHFE NICKEL              LMESHFNIc3      -22.08
        
($1 = 6.6191 Chinese yuan)

    
 (Reporting by Tom Daly; Editing by Amrutha Gayathri and Sunil
Nair)
  
 
 
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