METALS-Aluminium gains on China recovery hopes, in-line Fed hike

    (Recasts, updates prices)
    By Brijesh Patel
    June 16 (Reuters) - Aluminium prices advanced on Thursday,
supported by hopes of a recovery in top metals consumer China
and as investors digested a 75-basis-point interest rate hike by
the U.S. central bank.
    Three-month aluminium on the London Metal Exchange
gained 0.4% to $2,603 a tonne, as of 0707 GMT, after rising as
much as 2.2% earlier in the session. LME copper         was
steady at $9,231 a tonne.
    The most-traded July aluminium contract in Shanghai
ended daytime trading 0.5% higher at 20,005 yuan ($2,983.91) a
tonne.
    "Markets got worked up about inflation and pace of rate
hikes, and when it happens, the anxiety fades and it's helping
the metals market," said a Singapore-based metals trader.
    The U.S. Federal Reserve on Wednesday approved its biggest
interest rate hike since 1994, lifting the target federal funds
rate by 75 basis points to a range of between 1.5% and 1.75%.

    China's economy showed signs of recovery in May after
slumping in the prior month, as industrial production rose
unexpectedly.
    China's monthly production of aluminium reached a record
high in May after power consumption curbs were eased and as
COVID-19-induced lockdowns had little impact on output.

    "Factory activity in China will pick up as cities reopen,
but prices are expected to be range-bound due to weak demand to
come in the months ahead," the Singapore-based trader said.

    SUPPORT: China's state planner said it would expand the
scope of use of funds raised by local government special bonds
and ensure reasonable economic growth in the second quarter.

    DOLLAR: Limiting gains, the dollar        rose 0.5% towards
the 20-year peak, making greenback-priced commodities costlier
for buyers using other currencies.
    INVENTORIES: Aluminium stocks in
LME-registered warehouses fell to a fresh 21-year low of 416,125
tonnes, compared with nearly 2 million tonnes in March 2021.
    At 121,525 tonnes, copper stocks in LME-registered
warehouses have dropped more than 30% since the middle of May.

    OTHER METALS: LME zinc         rose 0.5% to $3,662.50 a
tonne, lead         gained 0.9% to $2,093, nickel         gained
0.2% to $25,900, and tin         climbed 1.1% to $32,800.
    Shanghai copper          was down 0.7%, zinc          gained
0.6%, nickel          eased 0.2%, lead          was flat, and
tin          jumped 5.9%.

($1 = 6.7002 Chinese yuan)

 (Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi
Aich and Subhranshu Sahu)