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METALS-Shanghai nickel jumps on tight stocks, output concerns

Kitco News

(Adds comment, details on Philippine outages, updates prices)

BEIJING, Jan 11 (Reuters) - Nickel prices on the Shanghai Futures Exchange (ShFE) climbed as much as 1 percent to their highest in two months on Thursday, tracking a rise in London a day earlier, as concerns over low stock levels and production outages lent support to the market.

"Nickel cathode in the warehouses is very tight... so there is some possibility to squeeze selling positions," said Xu Aidong, chief nickel analyst, Antaike.

Deliverable ShFE nickel warehouse stocks stood at 48,920 tonnes as of Jan. 5, compared with over 90,000 tonnes a year ago.

Four nickel mines in the Zambales region of the Philippines, a key nickel exporter, remain shut on environmental grounds, an official said on Thursday, while Japan's Sumitomo Corp has suspended output at a mine in Madagascar following a cyclone.

"The four mines in Zambales are still not allowed to resume production," said Wilfredo Moncano, director of the Philippine Mines and Geosciences Bureau. "No extraction, no new mining activities. What's only allowed is hauling of ores from their stockpiles."

FUNDAMENTALS

* SHFE NICKEL: The most traded Shanghai nickel contract climbed 0.9 percent at 101,220 yuan ($15,535.26) a tonne at the mid-session interval, having earlier touched 102,380 yuan a tonne, its highest since Nov. 9.

* LME NICKEL: Benchmark nickel on the London Metal Exchange (LME) was down 0.7 percent at $12,840 a tonne, as of 0510 GMT, partly reversing Wednesday's gains, when it touched $13,200 a tonne, its highest since June 2015. * MADAGASCAR: Sumitomo said on Thursday the company and its partners Sherritt International Corp and Korea Resources Corp halted output at the Ambatovy nickel mine in Madagascar on Jan. 4, the day before Cyclone Ava hit the area. * COPPER: Three-month copper on the LME was up 0.2 percent at $7,169 a tonne, building on its 0.7 percent gain in the previous session. The most-traded SHFE copper contract was up 0.4 percent at 55,090 yuan a tonne.

* CHINA: Tongling Nonferrous Metals Group , one of China's top copper smelters, will suspend production at its Jinguan Copper unit for three days from Friday for repairs, a source familiar with the matter said. * PERU: The government of Peruvian President Pedro Pablo Kuczynski is evaluating a $2.4 billion railway project to transport mineral concentrates from a copper-rich Andean region to the Pacific coast for export. * ALUMINIUM: The most-traded aluminium contract on the ShFE climbed 1.3 percent to 15,220 yuan per tonne, pulled higher by Wednesday's 1.4 percent jump in London .

* FRANCE: Liberty House, the industrial arm of British steel tycoon Sanjeev Gupta's GFG Alliance, has made a binding offer for miner Rio Tinto's aluminium smelter in Dunkirk, France, the largest in Europe. * COBALT: Democratic Republic of Congo is considering more than doubling royalties on cobalt, a key ingredient in lithium-ion batteries, under a new mining code nearing parliamentary approval, the mines minister said on Wednesday. * For the top stories in metals and other news, click or MARKETS NEWS

* The New Year rally in Asian shares ran out of steam on Thursday as concerns about the U.S. administration's protectionist stance hit Wall Street while U.S. bonds were dented by speculation China may curtail buying. DATA AHEAD (GMT)

0900 Germany Full Year GDP 2017

1000 Euro Zone Industrial Production Nov

PRICES

BASE METALS PRICES 0510 GMT Three month LME copper 7169 Most active ShFE copper 55090 Three month LME aluminium 2198.5 Most active ShFE aluminium 15220 Three month LME zinc 3357 Most active ShFE zinc 26180 Three month LME lead 2561.5 Most active ShFE lead 19370 Three month LME nickel 12840 Most active ShFE nickel 101220 Three month LME tin 20040 Most active ShFE tin 145340

BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 580.65 LME/SHFE ALUMINIUM LMESHFALc3 -1449.01

LME/SHFE ZINC LMESHFZNc3 298.27 LME/SHFE LEAD LMESHFPBc3 -747.89 LME/SHFE NICKEL LMESHFNIc3 1652.88

($1 = 6.5155 Chinese yuan)


<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Tom Daly; additional reporting by Enrico Dela Cruz in Manila; Editing by Richard Pullin and Sherry Jacob-Phillips)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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