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METALS-Shanghai aluminum rises to six-month high as inventories fall

Mai Nguyen
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(Adds quotes, details) SINGAPORE, April 22 (Reuters) - Aluminum futures on the

Shanghai Futures Exchange (ShFE) rose on Monday to its

highest in about six months, following a drop in inventories last week and on investor expectations for stronger demand in the second quarter. The most active aluminum contract on ShFE jumped to as high as 14,180 yuan ($2,112.92) a tonne, the highest since Oct. 31, after data on Friday showed that aluminum stocks in warehouses tracked by ShFE <AL-STX-SGH> dropped to 665,067 tonnes, their lowest since November 2017. "(The second quarter) should be a strong demand season, so this would probably give aluminum price a bit of support. Macro data released last week is kind of strong, much better than expectations for GDP and also real estate," said Jackie Wang, a China-based analyst for metals consultants CRU. The contract last week broke the 14,000-yuan barrier, considered an average break-even for Chinese aluminum smelters, for the first time in four-and-a-half months on an improved outlook for the metal in China, the world's biggest user.

But investors are cautious about how high aluminum prices can go, as the Chinese government is unlikely to give a strong stimulus to the construction sector, the top user of aluminum, to avoid a property bubble, Wang said. "We still think demand growth in 2019 will be slower than 2018," she added.

FUNDAMENTALS

* PRICES: Shanghai copper was flat at 49,390 yuan a

tonne as of 0352 GMT, while nickel rose 0.6 percent andlead advanced 0.5 percent.* COPPER: China's refined copper output in March rose 10.2

percent from a year earlier to 705,000 tonnes in March, the country's National Bureau of Statistics said on Friday. However, that is the lowest monthly total in records on the bureau's website since June 2016.

* SCRAP: Chinese authorities will start accepting applications for licenses to import unspecified quantities of soon-to-be-restricted types of scrap metal from late May, the recycling branch of the China Nonferrous Metals Industry Association said on Saturday.

* CHINA ECONOMY: China will maintain policy support for the economy, which still faces "downward pressure" and difficulties after better-than-expected first quarter growth, a top decision-making body of the Communist Party said on Friday.

* HOLIDAY: The London Metal Exchange is closed for a public holiday and will be open again on Tuesday.

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

PRICES Three month LME copper Most active ShFE copper Three month LME aluminum Most active ShFE aluminum Three month LME zinc Most active ShFE zinc Three month LME lead Most active ShFE lead Three month LME nickel Most active ShFE nickel Three month LME tin Most active ShFE tin

ARBS

($1 = 6.7111 Chinese yuan renminbi)

(Reporting by Mai Nguyen, Editing by Sherry Jacob-Phillips and Christian Schmollinger)