cuts@ (Adds comment, updates prices) BEIJING, Sept 12 (Reuters) – Shanghai base metals fell on Wednesday on reports that China is considering more flexible industrial production restrictions in its northern provinces this winter as part of the country’s fight against smog.
Northern China is a major producing area for aluminum and the central government may allow the regions to set their own production levels instead of repeating the “one-size fits all” approach taken last year. Aluminum fell more than 1 percent to a three week-low on the Shanghai Futures Exchange (ShFE) on expectations provincial curbs could remove less supply than the 30 percent cuts stipulated in a draft central government document released last month. Nickel, used to make stainless steel, also fell, tracking lower ferrous metal prices with Chinese steel rebar futures slumping on the possibility of the more flexible curbs. The switch has “raised the specter of weak controls that would allow output to remain high,” ANZ wrote in a note, adding that base metals were also being weighed down as “concerns over the impact of U.S. tariffs on China continue to rise.”
FUNDAMENTALS
* ALUMINIUM: The most-traded ShFE aluminum contract , for November delivery, fell as much as 1.6 percent to 14,540 yuan ($2,115) a tonne, its lowest since Aug. 21, and stood at 14,560 yuan by the mid-session interval. Three-month aluminum on the London Metal Exchange edged up 0.4 percent to $2,053 a tonne as of 0350 GMT, after falling 2.4 percent in the previous session.
* NICKEL: The metal used to make stainless steel fell as much as 2.4 percent in Shanghai to 99,920 yuan a tonne, its lowest since April 10. LME nickel fell as much as 1.2 percent to $12,085 a tonne, its lowest since Dec. 28.
* NICKEL: Norilsk Nickel analyst Alex Khodov says the global nickel deficit will be 90,000 tonnes in first eight months of 2018 and will reach 120,000 tonnes by year end.
* COPPER: ShFE copper slipped 0.1 percent to 47,710 yuan a tonne, while LME copper added 0.3 percent to $5,878 a tonne, having lost 0.9 percent on Tuesday.
* CHILE: Chile produced 3.31 million tonnes of copper in the first seven months of the year, an increase of 10.8 percent from the same period a year earlier, Chilean copper commission Cochilco said on Tuesday.
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MARKETS NEWS
* Asian stocks slipped to 14-month lows as investor confidence was chilled by the latest round of verbal threats in an intensifying U.S.-China trade conflict.
DATA AHEAD (GMT)
0900 Euro zone Industrial production Jul
1800 U.S. Federal Reserve Beige Book of economic conditions
PRICES 0354 GMT
Three month LME copper 5878 Most active ShFE copper 47700 Three month LME aluminum 2053 Most active ShFE aluminum 14555 Three month LME zinc 2334.5 Most active ShFE zinc 20900 Three month LME lead 1986 Most active ShFE lead 18850 Three month LME nickel 12165 Most active ShFE nickel 100930 Three month LME tin 18925 Most active ShFE tin 143950 LME/SHFE COPPER LMESHFCUc3 822.8 LME/SHFE ALUMINIUM LMESHFALc3 -1746.16 LME/SHFE ZINC LMESHFZNc3 1128.08 LME/SHFE LEAD LMESHFPBc3 1589.25 LME/SHFE NICKEL LMESHFNIc3 3016.82
($1 = 6.8747 Chinese yuan renminbi)
(Reporting by Tom Daly; editing by Richard Pullin and Christian Schmollinger)