News: METALS-Aluminium hits five-year high as China supply cuts loom

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    • LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20
    • Aluminium up nearly 30 pct this year on supply cuts

    (Updates throughout, changes dateline to LONDON)

    Aluminium soared to its highest in five years on Wednesday on reports that China's mammoth producer Chinalco was cutting output two months early and would soon pare back stocks of available metal.

    Concerns that an environmental crackdown by Chinese authorities will create shortages have boosted aluminium prices, the top performer on London Metal Exchange (LME) this year with gains of 28 percent.

    Benchmark aluminium CMAL3 on the LME was up 3 percent to $2,188.50 per tonne by 1046 GMT after briefly touching $2,191.50, its highest since September 2012. The metal was in its third straight session of gains.

    "China is making an effort to make efforts to cut back ahead of the winter months," Natixis analyst Bernard Dahdah.

    "Bear in mind that Chinese elections are also coming up and showing how serious they are about pollution is always good before an election," he said.

    CHINALCO: A report from an industry website on Wednesday said Chinalco, China's largest state-run aluminium producer, had on Tuesday started to reduce production at its units by more than 30 percent ahead of time.

    STOCKS: Aluminium inventories in LME-approved warehouses fell to levels last seen in 2008 at 1.3 million, down 2,725 tonnes from Tuesday.

    CHINA OUTPUT: China's aluminium production last month fell to the lowest since April 2016 at 2.64 million tonnes.

    Earlier this year, China launched an aggressive campaign to curb choking smog in its northern regions, mandating a range of output cuts by the steel and aluminium producers. Aluminium makers must cut capacity by more than 30 percent across 28 cities.

    COPPER SPREADS: Rising copper stocks helped to push the discount for cash copper over the three-month contract MCU0-3 to nearly $50 a tonne. On Monday, it rose above $50 which was its highest since December 2009. This suggests that more metal will be delivered over the coming days.

    COPPER PRICES: LME copper CMCU3 was flat at $6,543 tonnes, having made modest gains in the last three sessions.

    CHINA LEAD: Lead has been particularly hard hit by environmental inspections with 80 percent of illegal secondary smelters shut down since the second half of last year, according to research group Antaike.

    LEAD PREMIUMS: Premiums for lead CMPB3 in China's bonded zones jumped $10 to $170-$190 amid tightening domestic supply.

    INSG: The global nickel market tipped into a wider deficit in July as demand from top stainless steel producer China surged, data from the International Nickel Study Group showed on Wednesday.

    Nickel CMNI3 jumped 2.9 percent to $11,460. PRICES: Lead CMPB3 rose 1.5 percent to $2,457.580 tonnes, zinc CMZN3 added 1 percent to $3,138 while tin CMSN3 inched up half a percent to $20,760

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    LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20

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