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METALS-London aluminium hits five-year high on China supply cuts

MELBOURNE, Oct 26 (Reuters) - London aluminium surged to its highest in more than five years on Thursday on expectations of dwindling supply as China aluminium makers cut production over winter.

FUNDAMENTALS

* London Metal Exchange aluminium crashed through $2,200 to peak at $2211 a tonne, the highest since March 2012. Prices traded at $2204 a tonne by 0155 GMT.

* Shfe aluminium hit its highest in more than a week at 16,555 yuan ($2,496), but remained well below their recent near eight-year high of 17,345 yuan a tonne from last month.

* The move in LME aluminium came amid a weaker dollar, improving chart picture, and options positioning traders said. A weaker dollar makes metals more affordable for buyers paying with other currencies.

* "After a quiet few weeks, aluminium feels like it is finding a decent base into $2,125-15 and should we break above $2,175 it might trigger another run at $2,200, which has the biggest open interest for November expiry (over 4,000 lots open)," broker Marex Spectron said in a report overnight.

* Other metals were also supported with LME zinc and nickel up 0.7 percent and 0.2 percent, respectively. London copper was steady above the $7,000 mark, not far from a three-year high of $7,177 a tonne hit earlier this month.

* In Shanghai, zinc rallied 1.5 percent but Shfe nickel fell 0.6 percent. Shanghai rebar prices fell 2 percent, which could drag down steel inputs nickel and zinc later in the session.

* The euro inched higher on Thursday, as investors awaited details of the European Central Bank's plans for scaling back its bond-buying stimulus programme, while the dollar took a breather after its recent rally.

* US ECONOMY: New orders for key U.S.-made capital goods increased more than expected in September and shipments rose for an eighth straight month, pointing to robust business spending that should help to mitigate the impact on the economy from the hurricanes.

* Norsk Hydro said on Wednesday curtailments of primary production in China have driven positive sentiment and could result in a tighter aluminium market in 2018.

* China Zhongwang Holdings Ltd said on Thursday it had acquired a controlling stake in an Australian all-aluminium superyacht builder, as the Chinese firm aims to expand the application of aluminium in the marine sector.

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MARKETS NEWS

* Asian stocks stalled on Thursday, weighed as Wall Street shares pulled back from record highs, while the euro stretched gains ahead of a European Central Bank policy meeting at which it could take a major step away from accommodative policy.

BASE METALS PRICES 0211 GMT Three month LME copper 7007.5 Most active ShFE copper 54840 Three month LME aluminium 2210 Most active ShFE aluminium 16500 Three month LME zinc 3217 Most active ShFE zinc 26045 Three month LME lead 2491 Most active ShFE lead 19280 Three month LME nickel 11865 Most active ShFE nickel 95350 Three month LME tin 19840 Most active ShFE tin 145190

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 471.16 LME/SHFE ALUMINIUM LMESHFALc3 -529.02 LME/SHFE ZINC LMESHFZNc3 606.7 LME/SHFE LEAD LMESHFPBc3 -701.72 LME/SHFE NICKEL LMESHFNIc3 2396.7

($1 = 6.6317 Chinese yuan)

(Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips)