METALS-London aluminum rallies 2 percent on sanctions concerns

MELBOURNE, April 9 (Reuters) - London aluminum rallied two percent on Monday and is expected to rise further on concerns that sanctions by the United States on aluminum giant Rusal could hamper trade in some seven percent of the world's annual supply of the metal. The United States on Friday imposed sanctions against Russian businessmen, companies and government officials, striking at associates of President Vladimir Putin in one of Washington's most aggressive moves to punish Moscow for a range of activities. Shares of United Company Rusal Plc fell 31 percent in Hong Kong on Monday after it was included in the new list.

"Market concerns have that the sanction against Rusal and its own technical default assessment may lead to supply shortage in both aluminum and alumina," said Hong Kong broker Argonaut in a report. Rusal produced some 3.7 million tonnes of aluminum in 2017, about 7 percent of the world's total, Argonaut said. Its annual alumina production of 11.5 million tonnes was also about 7 percent of the global total, while it produced about 4 percent of the world's bauxite, the broker said. "It is expected that (the aluminum price rise) will extend further," Argonaut said. FUNDAMENTALS

* ALUMINIUM: London Metal Exchange aluminum rallied 2 percent to $2,082.0 a tonne by 0304 GMT, adding to a 1.6 percent gain on Friday and taking prices to the highest since March 22. On the Shanghai Futures Exchange where markets reopened after a four-day break, aluminum was up nearly 1 percent.

* COPPER: LME copper edged up to $6,786 a tonne, having dropped 0.7 percent on Friday. The world's biggest annual copper conference, CESCO in Chile, begins this week.

* TRADE: U.S. President Donald Trump predicted on Sunday that China would take down its trade barriers, expressing optimism despite escalating trade tensions between the world's two largest economies that have roiled global markets.

* JAPAN COPPER: Japan's copper output in the first half of the 2018/19 financial year to March 31 is forecast to rise 6 percent from the year before, Reuters calculations from plans outlined by smelters showed, amid solid demand for semiconductors and auto parts.

* INVESTORS: Copper speculators upped their net long position in copper futures and options in the most recent week data from the U.S. Commodity Futures Trading Commission showed.

* NICKEL: Shanghai nickel prices sank 1.9 percent while zinc prices slid 1.2 percent, tracking a drop in iron ore given ongoing Sino-U.S. trade tensions.

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MARKETS NEWS

* Asian shares edged higher on Monday as a bounce in U.S. stock futures soothed sentiment even as U.S. President Donald Trump kept up his twitter war with China over trade just a couple of days before President Xi Jinping gives a keynote speech. 1/8 MKTS/GLOB 3/8

DATA/EVENTS 0600 Germany Trade data Feb 0830 Euro zone Sentix index Apr 1400 U.S. Employment trends Mar PRICES

BASE METALS PRICES

Three month LME copper 6767.5 Most active ShFE copper 50150 Three month LME aluminum 2082.5 Most active ShFE aluminum 14105 Three month LME zinc 3210 Most active ShFE zinc 24345 Three month LME lead 2374.5 Most active ShFE lead 18475 Three month LME nickel 13120 Most active ShFE nickel 98150 Three month LME tin 20980 Most active ShFE tin 144160

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 564.39 LME/SHFE ALUMINIUM LMESHFALc3 -1095.89 LME/SHFE ZINC LMESHFZNc3 178.4 LME/SHFE LEAD LMESHFPBc3 142.46 LME/SHFE NICKEL LMESHFNIc3 393.34

(Reporting by Melanie Burton; editing by Richard Pullin)