METALS-Shanghai aluminium hits 17-month low, set for worst quarter since mid-2010

mid-2010@ (Recasts, adds comment and updates prices) BEIJING, March 30 (Reuters) - Shanghai aluminium fell to a 17-month low on Friday and was on track to end the quarter with its steepest quarterly drop since mid-2010 following a relentless build-up in Chinese inventories. The metal has declined 10.7 percent in the first three months of the year after an 8.7 percent drop in the previous quarter, when underwhelming winter supply cuts in top producer China took the steam out of an earlier rally. Deliverable Shanghai Futures Exchange (ShFE) aluminium stocks are at a record high of nearly 1 million tonnes, while U.S. tariffs on Chinese aluminium and the prospect of a trade war between the two countries has also hit sentiment. The London Metal Exchange is closed on Friday and Monday for the Easter holiday. On Thursday, London aluminium hit a near eight-month low, closing just above $2,000 a tonne.

" e have to suspect that the markets remain concerned with

how aggressively the (Chinese) government will now police production now that the winter season is over," Edward Meir, independent commodity consultant at brokerage INTL FCStone, said in a note late on Thursday.

FUNDAMENTALS

* SHFE ALUMINUM: The most traded May aluminium contract on the ShFE was down 0.5 percent at 13,730 yuan a tonne at 0525 GMT. It earlier touched 13,630 yuan a tonne, its lowest since late October 2016.

* SHFE COPPER: The most-traded May ShFE copper contract was up 0.6 percent at 49,970 yuan a tonne on a weaker dollar, which makes metals cheaper for holders of other currencies.

* SHFE COPPER: Shanghai copper has shed 11 percent so far this quarter, its worst performance since the second quarter of 2013. It has declined 5.7 percent in March alone, the sharpest monthly fall since November 2015, as trade war concerns spooked metals markets.

* OTHER METALS: Nickel was the only one among the five key Shanghai base metals set to end the quarter higher. It has gained 2 percent, while zinc has declined 3 percent and lead was down 1.6 percent.

* TC/RCs: China's top copper smelters on Friday cut their minimum treatment and refining charges (TC/RCs) for copper concentrate by 10.3 percent for the second quarter of 2018, two people with direct knowledge of the matter said.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Stocks steadied on Thursday, after a woeful week for major technology companies, even as global equities careened towards their first quarterly drop in two years.

PRICES

BASE METALS PRICES 0525 GMT Most active ShFE copper 49970 Most active ShFE aluminium 13725 Most active ShFE zinc 24900 Most active ShFE lead 18715 Most active ShFE nickel 99390 Most active ShFE tin 142740

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 781.1 LME/SHFE ALUMINIUM LMESHFALc3 -874.32 LME/SHFE ZINC LMESHFZNc3 557.48 LME/SHFE LEAD LMESHFPBc3 281.58 LME/SHFE NICKEL LMESHFNIc3 -162.97

(Reporting by Tom Daly Editing by Kenneth Maxwell and Subhranshu Sahu)