LONDON, Sept 28 (Reuters) – Zinc prices hit a seven-week high on Friday after stocks in Shanghai slid to the lowest in more than a decade and some speculators cancelled bearish positions. Aluminium, however, slipped to a one-week low after a strike ended by workers producing raw material alumina in Australia. Zinc inventories in warehouses monitored by the Shanghai Futures Exchange ZN-STX-SGH slid 13.6 percent to 29,204 tonnes, the lowest since September 2007, weekly data showed. “We’re talking 10-year lows in inventory. While there’s definitely more mine supply coming through in zinc, the refined inventories are tight,” said analyst Colin Hamilton at BMO Capital Markets in London. Benchmark zinc on the London Metal Exchange was the biggest gainer, rising 1.2 percent to $2,537 a tonne in official open outcry activity. In later electronic trading, zinc touched $2,621, a jump of 4.6 percent and the strongest since Aug. 9.
* QUARTER END: Speculators were tidying up their portfolios ahead of the end of the quarter and also before China goes on a week-long market holiday, traders said. “We’ve seen many of these metals relatively short in positioning, so some of that might be cleaned up ahead of quarter end,” Hamilton said.
* ALCOA STRIKE: Unionised workers at Alcoa’s Western Australian alumina and bauxite operations agreed on Friday to end a strike that lasted more than six weeks. “It looks like some alumina trades are coming in significantly lower on the back of that news,” Hamilton said.
* ALUMINIUM: LME aluminium traded up 0.2 percent at $2,033 a tonne in official rings, erasing losses after touching a one-week low of $2,016.
* WINTER CUTS: Weighing on aluminium was news on Thursday that China decided not to impose blanket cuts on industrial output in 28 northern cities this winter, expected to result in less restrictions on aluminium supply.
* NICKEL: Shanghai nickel closed down 0.5 percent, tracking a fall in the ferrous complex, and ended the third quarter down 11.1 percent, its biggest quarterly drop in three years. LME nickel untraded in rings, was bid up 0.2 percent at $12,580.
* DOLLAR: Weighing on the LME complex was a firmer dollar index, buoyed by strong U.S. economic data and month-end investor flows, traders said.