×

METALS-LME aluminium teeters near 3-mth low as China smelters ramp up

MELBOURNE, March 15 (Reuters) - London aluminium hovered near its lowest since late December on Thursday on expectations of rising supply as China's winter pollution controls expire.

FUNDAMENTALS

* ALUMINIUM: London Metal Exchange aluminium crept up 0.2 percent to $2,094 a tonne, having slipped to the weakest since Dec. 19 at $2,087 on Wednesday. Support is seen at the 200 moving day average at $2,083, a break of which could trigger a steeper correction, as it would send a sell signal to momentum following funds.

* SHFE: Shanghai aluminium hit its lowest in 14 months at 13,820 yuan ($2,191) on Tuesday and last traded at 13,950 yuan.

* SMOG: The winter heating season ended on Thursday. Aluminium smelters in 28 northern Chinese cities had been told to reduce output by at least 30 percent from Nov. 15 to March 15, although the actual volume cut was below expectations, putting pressure on prices.

* OUTPUT: China's aluminium production fell 1.8 percent in January-February from a year earlier, data showed on Wednesday, as the country's pollution crackdown and supply-side reform kicked in. An estimated 4.4 million tonnes of new capacity are expected to be completed this year

* STOCKS: Shfe aluminium <AL-STX-SGH> stockpiles held at exchange warehouses are within a whisker of record highs near 850,000 tonnes, reflecting a surplus of domestic material.

* DISCOUNT: The discount between cash Shfe and physical prices <AL-A00-CCNMM> has narrowed to 35 yuan from 385 three weeks ago, reflecting a tightening market and an expected pick-up in nearby demand.

* COPPER: LME copper traded up 0.3 percent at $7,006 a tonne by 0157 GMT, adding to 0.6 percent gains from the previous session. Prices are expected to rise over the coming month as industrial production in the seasonally strongest second quarter ramps up.

* TRADE: The Trump administration is pressing China to cut its trade surplus with the United States by $100 billion, a White House spokeswoman said on Wednesday.

* COBALT: Glencore, the world's biggest producer of cobalt, has agreed to sell around a third of its cobalt production over the next three years to Chinese battery recycler GEM.

* SMOG: Eastern China's Jiangsu province will step up its war on pollution and focus on "high-quality development" following a spike in smog early this year.

* DOLLAR: Supporting metals, the dollar fell against the yen on Thursday as lingering worries about global trade tensions weighed on investors' risk appetite.

DATA AHEAD (GMT) 1230 U.S. New York Fed manufacturing Mar 1230 U.S. Import prices Feb 1230 U.S. Export prices Feb 1230 U.S. Weekly jobless claims 1230 U.S. Philly Fed business index Mar 1400 U.S. NAHB housing market index Mar PRICES

BASE METALS PRICES 0142 GMT Three month LME copper 7004.5 Most active ShFE copper 52360 Three month LME aluminium 2093 Most active ShFE aluminium 13945 Three month LME zinc 3233 Most active ShFE zinc 24810 Three month LME lead 2395 Most active ShFE lead 18495 Three month LME nickel 13835 Most active ShFE nickel 104200 Three month LME tin 21195 Most active ShFE tin 144820

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 939.75 LME/SHFE ALUMINIUM LMESHFALc3 -1367.78 LME/SHFE ZINC LMESHFZNc3 643.77 LME/SHFE LEAD LMESHFPBc3 153.53 LME/SHFE NICKEL LMESHFNIc3 976.21

($1 = 6.3075 Chinese yuan renminbi)

(Reporting by Melanie Burton; editing by Richard Pullin)