MANILA, Jan 25 (Reuters) - London aluminium futures held close...

MANILA, Jan 25 (Reuters) - London aluminium futures held close to 20-month highs early in Asia on Wednesday, buoyed by reports of possible capacity cuts in China, while copper steadied near its highest in almost two months.

FUNDAMENTALS

• Three-month aluminium on the London Metal Exchange CMAL3 was little changed at $1,868.50 a tonne by 0119 GMT. The metal on Tuesday touched its highest level since May 2015 at $1,883.
• Traders cited a Bloomberg story saying that China is drawing up plans that would halt about 3.3 million tonnes of operational aluminium capacity during the winter to combat air pollution.
• China's top environment watchdog delivered verbal warnings last month to Chalco <601600.SS>, the nation's top aluminium producer, for failing to deal with pollution appropriately, state news agency Xinhua had reported.
• LME copper CMCU3 was off 0.2 percent at $5,933 a tonne, not far below Tuesday's peak of $5,956.50, its loftiest since Dec. 5.
• Tracking gains in its London counterpart, the most-traded March copper contract on the Shanghai Futures Exchange SCFcv1 rose 1.7 percent to 47,680 yuan ($6,955) a tonne.
• Unionised workers at BHP Billiton-run (BHP) Escondida, the world's biggest copper mine, said they rejected the company's latest wage offer and asked workers to vote for a strike and prepare for an extended conflict.
• BHP was on track to meet its iron ore production guidance for fiscal 2017 after reporting a strong second quarter for its most profitable business.
• Rio Tinto Plc (RIO) has agreed to sell its Australian unit Coal & Allied Industries Ltd to Chinese government-controlled Yancoal Australia Ltd (YAL) for up to $2.45 billion in cash.
• For the top stories in metals and other news, click [TOP/MTL] or [MET/L]

  MARKETS NEWS

• Asian stocks are set to climb to fresh three-month highs following a stronger Wall Street as investors welcomed U.S. President Donald Trump's eagerness to deliver on his campaign promises. [MKTS/GLOB]
• The dollar was firmer, with a rebound in Treasury yields helping the greenback pull away from recent lows. [USD/]

  DATA AHEAD (GMT) 0745 France Business climate Jan 0900 Germany Ifo business climate Jan 1400 U.S. Monthly home price index Nov PRICES Three month LME copper CMCU3 Most active ShFE copper SCFcv1 Three month LME aluminium CMAL3 Most active ShFE aluminium SAFcv1 Three month LME zinc CMZN3 Most active ShFE zinc SZNcv1 Three month LME lead CMPB3 Most active ShFE lead SPBcv1 Three month LME nickel CMNI3 Most active ShFE nickel SNIcv1 Three month LME tin CMSN3 Most active ShFE tin SSNcv1 ($1 = 6.8555 Chinese yuan)