METALS-Shanghai aluminum slips after Malaysia lifts bauxite ban

(Adds Shanghai closing prices, updates London prices) BEIJING, Feb 19 (Reuters) - Shanghai aluminum prices fell on Tuesday, after Malaysia said it would not extend a moratorium on mining bauxite when it expires on March 31, potentially reducing costs in the aluminum supply chain for top producer China. Bauxite is a rock refined to make alumina, which is then used to make aluminum metal. Chinese aluminum prices have been struggling to move away from two-year lows amid weak domestic demand and plentiful supply. "Not only is there a lack of fundamental support for the aluminum market, the cost support from bauxite may start to fade," Helen Lau, an analyst at Argonaut Securities, said in a note, adding that in 2015, before the moratorium, Malaysia accounted for over 40 percent of China's total imports. Australian bauxite prices <SMM-BAUX-AUSTA> spiked to a near three-year high in January but have since eased. "Recently the increased exports from Guinea and ... Australia have gradually taken the market share away from Malaysia. That said, Malaysia may still be a potential threat ... due to its proximity to China," Lau added.

FUNDAMENTALS

* SHFE ALUMINIUM: The most traded aluminum contract on the Shanghai Futures Exchange ended down 0.2 percent at 13,430 yuan ($1,981.76) a tonne. Three-month aluminum on the London Metal Exchange was up 0.1 percent at $1,858 a tonne as of 0704 GMT.

* ALUMINIUM: Mining giant Glencore has bought 200,000 tonnes of aluminum on the LME and will take delivery of the metal from warehouses owned by ISTIM UK in Port Klang, Malaysia, five sources familiar with the matter said.

* COPPER: Three-month LME copper edged down 0.3 percent to $6,258 a tonne, on course to snap a run of four straight daily gains on optimism over U.S.-China trade talks. ShFE copper closed up 1.1 percent, tracking Monday's jump in the LME price, which was also driven by supply concerns.

* BHP: The world's biggest miner BHP Group said on Tuesday its first-half profit fell 8 percent as copper earnings slumped because of declining ore quality at its Escondida mine and a number of production outages globally.

* TRADE: Chinese Vice Premier Liu He will visit Washington on Thursday and Friday to continue trade negotiations with the United States, China's Commerce Ministry said.

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MARKETS NEWS

* Asian shares hovered near four-month highs as investors took heart from some progress in Sino-U.S. trade talks, while the yen slipped as the Japanese central bank said it won't rule out further policy easing.

PRICES

BASE METALS PRICES 0712 GMT Three month LME copper 6262.5 Most active ShFE copper 49360 Three month LME aluminum 1857 Most active ShFE aluminum 13425 Three month LME zinc 2635 Most active ShFE zinc 21540 Three month LME lead 2029.5 Most active ShFE lead 16830 Three month LME nickel 12440 Most active ShFE nickel 99150 Three month LME tin 21175 Most active ShFE tin 150680

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 -52.83 LME/SHFE ALUMINIUM LMESHFALc3 -1172.38 LME/SHFE ZINC LMESHFZNc3 179.85 LME/SHFE LEAD LMESHFPBc3 369.01 LME/SHFE NICKEL LMESHFNIc3 204

($1 = 6.7768 Chinese yuan renminbi)

(Reporting by Tom Daly; editing by Richard Pullin and Shreejay Sinha)