News

Shanghai aluminium hits 2-mth high after Rio force majeure

Date 4/16/2018 4:43:21 PM Source: Reuters

       BEIJING, April 16 (Reuters) - Shanghai aluminium prices hit a two-month high on Monday after Rio Tinto  RIO.AX   RIO.L  said it would declare force majeure on certain customer contracts in light of U.S. sanctions on its partner, Russian aluminium giant Rusal  0486.HK .

 

Rusal holds a 20 percent stake in Rio's Queensland Alumina refinery in Australia. Concerns over supply shortages focus not only on aluminium but also on the substance used to make the metal.

 

"China and Russia's aluminium industry are now both affected by the sanctions," consultancy AZ China said in a note over the weekend, referring to a 10 percent import tariff imposed by U.S. President Donald Trump.

 

"Trump's policies are bound to have an impact on the global aluminium landscape," it added.

 

       China, the world's largest aluminium producer, "may be able to step in and supply metal to Rusal customers, possibly even for political reasons", but this would be "only a temporary alleviation on the impact", AZ China said.

            

        FUNDAMENTALS

* SHFE ALUMINIUM: The most-traded June aluminium contract on the Shanghai Futures Exchange  SAFcv1  closed up 0.9 percent at 14,625 yuan ($2,327) a tonne. It earlier touched its highest since Feb. 12 at 14,670 yuan.

 

* LME ALUMINIUM: Three-month aluminium on the London Metal Exchange  CMAL3  had climbed 1.3 percent to $2,315.50 a tonne by 0709 GMT, after hitting a six-high year of $2,340 Friday and posting its biggest weekly gain since the current contract was launched.

 

* RUSAL: Rio Tinto also said on Friday it was reviewing Rusal's  0486.HK  20 percent stake in the Queensland Alumina refinery, Rusal's supply and offtake arrangements, bauxite sales to Rusal's refinery in Ireland and offtake contracts for alumina.

 

* RUSAL STOCK: Rusal shares fell more than 30 percent to a record low in early trading in Hong Kong. The stock was last trading at HK$1.44 ($0.1834), down from HK$4.64 on April 6 before U.S. sanctions were imposed. Rusal shares in Moscow fell 14 percent.

 

    * CHINA GDP: China likely carried most of its strong

economic momentum from last year into the first quarter of 2018, with government crackdowns on financial risks and industrial pollution dragging less on activity than earlier expected, a Reuters poll showed.

 

* COPPER: Three-month copper on the LME  CMCU3  gained 0.1 percent to $6,838.50 a tonne, while Shanghai copper  SCFcv1  also edging up 0.1 percent to end at 50,490 yuan a tonne.

 

* OTHER METALS: LME zinc  CMZN3  rose 0.5 percent to $3,131.50 a tonne and lead  CMPB3  climbed 0.7 percent to $2,320. 

   

  

       MARKETS NEWS   

    * U.S. stock futures firmed and oil prices fell as investors wagered the latest U.S.-led strike on Syria would not escalate into a wider conflict, though Asian equities turned mixed as selling in bank shares slugged Chinese indexes. The dollar dipped.