Aluminium hits near one-month high on signs of tighter China supply

* China aluminium smelters losing $145/T -Commerzbank

* China zinc production 'very weak' -Deutsche Bank

* Stocks slump on IMF growth forecasts, China data (Adds closing prices, detail)

By Maytaal Angel

LONDON, Jan 22 (Reuters) - Aluminium prices hit their highest in nearly a month on Tuesday as investors brushed off weaker economic growth in China to focus on signs of falling production.

Trading volumes were thin ahead of the Lunar New Year holiday, when China, the world's largest producer of aluminium, will shut for a week.

"We're heading into softer seasonal flows (but) nearly 3 million tonnes of (Chinese aluminium) smelting capacity has closed and inventories are drawing on a counter-seasonal basis," Deutsche Bank metals strategist Nick Snowdon said.

But the wider outlook for metals is one of price stagnation, he said, because of a standoff between poor macroeconomic data and upside policy risk such as further stimulus in China.

China's economy cooled in the fourth quarter, hit by faltering domestic demand and bruising U.S. tariffs, dragging annual growth to its lowest level in nearly three decades in 2018 and pressuring Beijing for more stimulus.

* ALUMINIUM: Three-month aluminium on the London Metal Exchange closed up 1.7 percent at $1,883 a tonne, having hit its strongest since late December.

* CHINA ALUMINIUM: "The question is how long China can maintain (its) recent record-high production rate, given Chinese smelters are currently chalking up average losses equating to $145 per tonne," Commerzbank said in a note, citing data from Shanghai Metals Market.

* COPPER: Bellwether copper ended down 0.8 percent at $5,935 as global equities slumped after the International Monetary Fund on Monday warned of a darkening growth outlook.

* CHILE COPPER: The union of supervisors at Chilean state miner Codelco's Gabriela Mistral mine has rejected the company's final offer for a new collective labour agreement, raising the spectre of a strike in the coming days.

* U.S.-CHINA: The United States will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou in a move certain to ratchet up tensions with China.

* BHP: Global miner BHP Group raised its 2019 copper production forecast to between 1.6 million and 1.7 million tonnes.

* NICKEL DEFICIT: The global nickel market deficit narrowed to 4,900 tonnes last November from the previous month's deficit of 10,600 tonnes.

* OTHER METALS: Lead ended up 0.5 percent at $2,021 a tonne, tin ended down 1.1 percent at $20,425, nickel closed down 1.9 percent at $11,580 while zinc ended down 0.5 percent at $2,576, having hit its highest since mid-December.

(Additional reporting by Tom Daly; Editing by Dale Hudson/David Goodman/Alexander Smith)

First Published: 2019-01-22 04:26:12
Updated 2019-01-22 20:12:10


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