Aluminium hits 2-week low on rising Chinese stockpiles

LONDON, Feb 1 (Reuters) – Aluminium hit a two-week low on Thursday, continuing to reverse last year’s gains as rising stockpiles in top producer China reinforced worries that the Chinese market remains in surplus despite capacity cuts. Shanghai Futures Exchange (ShFE) aluminium stocks are at 790,958 tonnes, their highest ever levels, despite Beijing’s efforts to tackle pollution by ordering mills to cut capacity during winter. “The cuts have not been as much as the market was expecting, and (coupled) with weaker demand ahead of the Chinese new year, ShFE stocks have increased,” said Societe Generale metals specialist Robin Bhar. “We’ll have a better picture after the new year of how demand is going to evolve but for now the market has run a bit cool on pricing. China’s economy seems stable (if) slightly weaker,”FUNDAMENTALS: * ALUMINIUM: London Metal Exchange aluminium slipped 0.3 percent to $2,212 a tonne by 1115 GMT, having earlier hit its weakest since Jan. 18 at $2,118.50. Aluminium has lost 2.5 percent so far this year. * CHINA DEMAND: Growth in China’s manufacturing sector remained elevated in January, a private survey showed on Thursday, though it stood in contrast with an official survey on Wednesday pointing to a slight loss of momentum. * ASIA FACTORIES: Asia’s factories got off to a strong start in 2018, with manufacturing activity in many countries gaining momentum and hitting multi-year highs as global demand for hi-tech products remained strong. * ZINC TECHNICALS: Indicating nearby tightness in zinc, LME data showed one entity holds more than 90 percent of warrants, cash and “tom” positions. Also, cash zinc was trading at a $55.50 a tonne premium to the three-month price. * CHINA STEEL: China’s top steelmaking province Hebei denied news reports that it will extend steel production curbs imposed for the winter season. * COPPER SUPPLY: Glencore said its copper output in 2018 should rise to nearly 1.5 million tonnes as its Katanga mine in Democratic Republic of Congo ramps up. * NICKEL SUPPLY: Japan’s Sumitomo Corp said it has resumed production at the Ambatovy nickel-cobalt project in Madagascar from end-January after halting operations earlier last month due to a cyclone. * TIN: Indonesia’s PT Timah said it was aiming for an 18 percent increase in output this year to around 36,700 tonnes, with prices of the metal expected to be between $20,000 and $22,000 per tonne. * LEAD: Lead rallied 1 percent amid a crunch on nearby metal supply. LME stocks have slumped by around 7 percent since early January to below 135,000 tonnes, a three-year low.