(Adds Shanghai closing prices, updates London prices)
BEIJING, June 1 (Reuters) – London and Shanghai nickel
prices rose for a fourth straight session on Friday, supported
by production cuts in China, plunging nickel inventories and
higher steel prices.
Nickel stocks in Shanghai Futures Exchange (ShFE) warehouses
<SNI-Total-W> have fallen to 27,430 tonnes as of Friday from
45,566 tonnes on Jan. 19, while London Metal Exchange (LME)
nickel stocks <MNISTX-TOTAL> have dropped for 18 straight
sessions.
“Nickel inventory was reduced a lot in ShFE warehouses but
the total inventory nickel in China was down by less,” said Xu
Aidong, chief nickel analyst at Chinese research house Antaike.
Some nickel pig iron production in Shandong province has
been suspended due to the upcoming Shanghai Cooperation
Organisation summit in Qingdao, she added.
An official at Shandong Xinhai Technology Co confirmed the
company has been told to reduce output of nickel pig iron, an
iron-rich feed for stainless steel plants.

FUNDAMENTALS
* SHFE NICKEL: The most-traded nickel contract on the
Shanghai Futures Exchange, for July delivery, rose as
much as 5.5 percent to 120,000 yuan ($18,701.78) a tonne, a
fresh three-year high, and closed up 2.1 percent at 116,110
yuan. The contract notched a weekly gain of 6.2 percent, its
biggest since the week ended Jan. 26.
* LME NICKEL: Three-month nickel on the London Metal
Exchange rose as much as 3.1 percent to $15,690 a tonne,
its highest since April 19, and was at $15,280 a tonne at 0735
GMT. It is up 3.2 percent this week. Open interest in LME nickel
was at its highest since January 2015.
* REBAR: Shanghai steel rebar prices rose to their
highest in nearly three months on Friday.
* ALUMINIUM: Canada and Mexico retaliated against the United
States’ decision on Thursday to impose tariffs on steel and
aluminium imports and the European Union had its own reprisals
ready to go, re-igniting investor fears of a global trade war.

* ALUMINIUM: London aluminium rose 0.3 percent to
$2,298 a tonne and the most-traded Shanghai aluminium contract
closed down 0.1 percent at 14,650 yuan a tonne.
* COPPER: London copper edged down 0.1 percent to
$6,846.50 a tonne, while ShFE copper closed up 0.5
percent at 51,480 yuan a tonne.

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MARKETS NEWS
* Asian equities recovered from early weakness on Friday as
a lower yen supported Japanese stocks and firm exports boosted
South Korean markets. Still, rekindled concerns about U.S. trade
policies limited regional gains.

PRICES
BASE METALS PRICES 0748 GMT
Three month LME copper 6845
Most active ShFE copper 51470
Three month LME aluminium 2299
Most active ShFE aluminium 14650
Three month LME zinc 3100.5
Most active ShFE zinc 24260
Three month LME lead 2448
Most active ShFE lead 19825
Three month LME nickel 15250
Most active ShFE nickel 116120
Three month LME tin 20650
Most active ShFE tin 154830

BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCU 330.29
c3
LME/SHFE ALUMINIUM LMESHFAL -2484.22
c3
LME/SHFE ZINC LMESHFZN 547.81
c3
LME/SHFE LEAD LMESHFPB 482.5
c3
LME/SHFE NICKEL LMESHFNI -339.74
c3
($1 = 6.4165 Chinese yuan)

(Reporting by Tom Daly; Editing by Richard Pullin and
Subhranshu Sahu)