METALS-London aluminium eyes biggest weekly jump in 38 years on Rusal sanction

sanction@ (Adds comment, detail, updates prices) MELBOURNE, April 13 (Reuters) - London aluminium slipped on Friday but was on track for its biggest weekly gain on record after the United States imposed sanctions on Russia's UC Rusal, the world's second biggest producer of the metal, raising supply concerns. Traders have this week scrambled to stockpile aluminium, given customers who can no longer take Rusal metal will have to find a fresh source of supply in what is an already fast-tightening market. After a decade of oversupply, the global aluminium market has facing a deficit of some 800,000 tonnes already this year, said Dominic Schnider of UBS in Singapore. "We have a bullish view on aluminium with $2,400 as a target in three months. That's really based on the perception that overall supply growth is constrained by China and they have genuine interest in keeping an eye on capacity," Schnider said.

FUNDAMENTALS

* London Metal Exchange aluminium fell by 1.7 percent to $2,283.50, trimming gains for the week that were still approaching 14 percent. Prices topped out at $2,325 a tonne on Thursday which was a six-year high. A trader noted very wide spreads, reflecting an unusual lack of liquidity in the LME's biggest contract.

* RUSAL: U.S. sanctions on Russian businesses and individuals are hitting companies, including aluminium giant Rusal controlled by tycoon Oleg Deripaska, and triggering responses across markets.

* US ALUMINIUM STOCKS: Almost all the aluminium in the United States was removed from Comex warehouses this week. Stocks tumbled by about 44,000 tonnes to 11,168 tonnes. <AL-TTLTTDY-STX>

* SCRAMBLE: The rush for stocks was also reflected in time spreads on the LME with soaring prices for cash aluminium against the benchmark three-month contract. Cash aluminium traded $52 against three months, the highest in more than a decade. <CMAL0-3>

* CHINA ALUMINIUM: China's aluminium exports in March rose to their highest since June as favourable pricing led the world's biggest producer to sell more abroad even as the nation faces scrutiny over its trade practices amid a spat with the United States.

* CHINA EXPORTS: China's exports growth unexpectedly fell in March, the first drop since February last year, raising questions about the health of one of the economy's key growth drivers as trade tensions rapidly escalate.

* COPPER: LME copper edged up by 0.2 percent to $6,834 a tonne by 0511 GMT, adding to 1.9 percent drop from the previous session. Prices have support at the 200-day moving average of $6,743. Shanghai Futures Exchange copper eased by 0.6 percent to 50,570 yuan ($8,042) a tonne.

* POLLUTION: In what could potentially help U.S. aluminium makers boost production more quickly, U.S. President Donald Trump on Thursday ordered the Environmental Protection Agency to speed up its decision-making on air quality permitting to make it easier for manufacturers to expand and open new plants.

PRICES

BASE METALS PRICES 0455 GMT Three month LME copper 6846 Most active ShFE copper 50650 Three month LME aluminium 2300.5 Most active ShFE aluminium 14585 Three month LME zinc 3130 Most active ShFE zinc 23600 Three month LME lead 2344 Most active ShFE lead 18340 Three month LME nickel 14030 Most active ShFE nickel 104260 Three month LME tin 20960 Most active ShFE tin 143470

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 466.33 LME/SHFE ALUMINIUM LMESHFALc3 -2178.72 LME/SHFE ZINC LMESHFZNc3 230.95 LME/SHFE LEAD LMESHFPBc3 190.32 LME/SHFE NICKEL LMESHFNIc3 -82.83

($1 = 6.2886 Chinese yuan)

(Reporting by Melanie Burton; Editing by Subhranshu Sahu)