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METALS-Shanghai nickel surges to highest close in over two years

(Adds Shanghai closing prices) MELBOURNE/BEIJING, Nov 2 (Reuters) - Shanghai nickel soared two years on Thursday, tracking an earlier rise in London nickel on expectations of new demand from electric vehicles (EVs). Battery makers are increasingly turning to nickel to help power growing global electric car sales, analysts and executives say. Celia Wang, a nickel analyst at Grandflow Resources in Shanghai, said the rally was due to positive sentiment on demand for the metal at the LME Week conference in London. "All traders think the EV story will bring a bright future for nickel, especially funds," she said.

FUNDAMENTALS

* NICKEL: Shanghai nickel, which had jumped by its 6 percent limit on Wednesday, rallied further to finish at 101,450 yuan ($15,374.94) a tonne, its highest close since June 2015. LME nickel, which had hit its own highest in more than two years above $13,000 a tonne on Wednesday, was down 0.2 pct at $12,765 a tonne at 0704 GMT. POSITIONS: Futures brokerages increased their net long positions on the Shfe nickel contract for delivery in January by almost 20,000 lots on Thursday, according to Shfe data.

* LME: London Metal Exchange copper was down 0.1 percent at $6,922 a tonne, after a 1.3 percent gain on Wednesday. Zinc was down 0.8 percent, lead down 0.5 percent and aluminium slipped by 0.2 percent, each taking a breather after recent gains.

* SHFE: Shanghai Futures Exchange copper closed down 0.3 percent. Shfe zinc ended down 1.3 percent and aluminium fell by 0.9 percent.

* US FACTORY: A measure of U.S. factory activity retreated from a 13-1/2-year high in October as some of the boost from hurricane-related supply disruptions faded, but continued to point to strengthening manufacturing conditions.

* NAFTA: The current state of talks to update the NAFTA trade pact is creating uncertainty among businesses and could hurt investments and growth, Rio Tinto Aluminium chief executive Alf Barrios said on Wednesday.

* POLLUTION: China needs to improve law enforcement and make polluters pay to treat billions of tonnes of rural, industrial and household waste, the country's top legislator said in a report to parliament late on Wednesday.

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MARKETS NEWS

* Asian shares touched a 10-year high on Thursday after the U.S. Federal Reserve expressed optimism about the economy, virtually cementing the case for a year-end rate hike as investors awaited the formal nomination of the next head of the central bank.

DATA/EVENTS

BASE METALS 0704 PRICES GMT Three month 6922

LME copper

Most active 54030

ShFE copper

Three month 2182.5

LME aluminium

Most active 16150

ShFE aluminium

Three month 3249

LME zinc

Most active 25845

ShFE zinc

Three month 2468.5

LME lead

Most active 18700

ShFE lead

Three month 12765

LME nickel

Most active 101450

ShFE nickel

Three 19505

month LME tin

Most active 144080

ShFE tin

BASE METALS ARBITRAGE

LME/SHFE LMESHFCUc3 650.76

COPPER

LME/SHFE LMESHFALc3 -515.0 ALUMINIUM 7 LME/SHFE ZINC LMESHFZNc3 416.48 LME/SHFE LEAD LMESHFPBc3 -906.4

1

LME/SHFE LMESHFNIc3 1652.5 NICKEL 2

(Reporting by Melanie Burton and Tom Daly in BEIJING; Editing