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METALS-Nickel jumps as waste spill sparks supply fears

Mai Nguyen

(Updates prices, quotes) SINGAPORE, Aug 30 (Reuters) - London nickel surged to a near five-year peak on Friday while Shanghai nickel hit an all-time high, as a waste spill at a nickel plant in Papua New Guinea sparked supply shortage fears.

Shanghai's most-traded nickel contract jumped as

much as 3.3% to a record 130,890 yuan ($18,453.93) a tonne

before closing up 3.2%. London nickel rose as much as

1.7% to $16,730 a tonne, its highest since December 2014. A nickel plant of Metallurgical Corp of China's Ramu Nickel Cobalt project in Papua New Guinea is facing compensation claims and possibly closure after it spilled waste into a local bay, a country official said. "The market is now assuming that this supply may also be taken offline and this triggered further waves of buying and option covering," said Malcolm Freeman of Kingdom Futures in a note. FUNDAMENTALS

* NICKEL SPREAD: The premium for cash nickel over the three-month contract on the London Metal Exchange (LME) <MNI0-3> has spiked to a 10-year high of $99 a tonne, signaling tight nearby supply. One party holds 50%-80% of available LME inventories. <0#LME-WHL> "(Nickel is) tight all the way out to June 2020 now," said a metal trader.

* NICKEL STOCKS: Nickel inventories in LME-approved warehouses <MNISTX-TOTAL> have edged up in August, but are still hovering around a six-year low, while ShFE nickel stocks last week rose to their highest since June 2018. <SNI-TOTAL-W>

* NICKEL/TIN: ShFE nickel on Friday surpassed tin prices for the first time since both contracts were launched

in 2015, after LME nickel prices topped tin on Tuesday.

* CHINA: Factory activity in China is expected to have contracted for a fourth straight month in August, a Reuters poll showed, as the United States ratcheted up trade pressure and domestic demand remained sluggish.

* TRADE TALKS: Beijing said Chinese and U.S. trade negotiating teams are maintaining effective communication while both countries gave signs that they will resume trade talks in September.

* JIANGXI: China's Jiangxi Copper Co produced 749,300 tonnes of refined copper cathode in January-June, up 3.5% from a year earlier, and 102,000 tonnes of copper concentrate during the period, up 0.2% year-on-year.

* PRICES: LME copper eased 0.5%, aluminumedged down 0.3%, lead dipped 0.8%, while Shanghai copperrose 0.2%, lead fell 0.3% and tin

declined 0.1%.

* ZINC: Zinc prices on both the LME and ShFE were on track for a fifth straight monthly decline, as the U.S.-China prolonged trade war weighed on demand outlook. LME zinc

fell 0.9% while ShFE zinc declined 0.2%.* For the top stories in metals and other news, click


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


($1 = 7.0928 Chinese yuan)

(Reporting by Mai Nguyen; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)