METALS-Shanghai aluminum hits 17-month low, posts worst quarter since mid-2010

mid-2010@ (Updates prices, inventory data and milestones) BEIJING, March 30 (Reuters) - Shanghai aluminum touched a 17-month low on Friday and ended the first quarter with its steepest quarterly drop since mid-2010 following a relentless build-up in Chinese inventories, which have hit a fresh record high. The metal 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) aluminum stocks climbed to a new record high of over 970,000 tonnes, according to ShFE data released on Friday, while U.S. tariffs on Chinese aluminum 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 aluminum 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 aluminum contract on the ShFE closed down 0.2 percent at 13,770 yuan ($2,195.30) a tonne. It earlier touched 13,630 yuan a tonne, its lowest since late October 2016.

* SHFE COPPER: The most-traded May ShFE copper contract closed up 1.1 percent at 50,180 yuan a tonne on a weaker dollar, which makes metals cheaper for holders of other currencies.

* SHFE COPPER: Shanghai copper shed 11 percent in the first quarter, its worst performance since the second quarter of 2013. It declined 5.6 percent in March alone, the sharpest monthly fall since November 2015, as trade war concerns spooked metals markets.

* NICKEL: Nickel was the only one among the five key Shanghai base metals set to end the quarter higher. It gained 1.6 percent over the three months and tracked the ferrous complex higher with a 2.6 percent jump on Friday. Nickel is used to make stainless steel.

* ZINC/LEAD: Zinc declined 3.1 percent in Q1 and lead lost 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.

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PRICES

BASE METALS PRICES CLOSE Most active ShFE copper 50170 Most active ShFE aluminum 13765 Most active ShFE zinc 24940 Most active ShFE lead 18830 Most active ShFE nickel 99790 Most active ShFE tin 144560

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 942.29 LME/SHFE ALUMINIUM LMESHFALc3 -849.09 LME/SHFE ZINC LMESHFZNc3 570.99 LME/SHFE LEAD LMESHFPBc3 355.15 LME/SHFE NICKEL LMESHFNIc3 555.59

($1 = 6.2725 Chinese yuan)

(Reporting by Tom Daly Editing by Subhranshu Sahu and Amrutha Gayathri)