METALS-Shanghai nickel hits three-month high on supply worries

BEIJING, April 29 (Reuters) - Shanghai nickel extended gains on Wednesday to hit a three-month high, underpinned by mounting worries about supply loss after China's Huayou cut output at its Indonesian unit.

The most-traded nickel contract on the Shanghai Futures Exchange SNIcv1 was up 1.53% at 151,040 yuan ($22,090.27) per metric ton, as of 0118 GMT. It hit the highest since January 26 at 152,230 yuan earlier in the session.

Benchmark three-month nickel CMNI3 on the London Metal Exchange was up 0.13% at $19,475 per ton. The contract hit a nearly two-year high at $19,565 on Tuesday.

Nickel prices have already been supported by rising concerns over supply cuts due to lower production quota in Indonesia, while costs have increased because of a shortage of sulphur stemming from the Middle East conflict.

Zhejiang Huayou Cobalt 603799.SS said on Tuesday that its Indonesian unit would temporarily halt some production lines from May 1, slashing about half of the plant's output, after rising sulphur prices lifted costs at one of its key battery-nickel projects.

Indonesian HPAL producers, representing 14% of global supply, are facing challenges from rising sulphur prices and tightening supplies, keeping prices skewed to the upside, analysts at Morgan Stanley said in a note.

Among other SHFE metals, copper SCFcv1 fell 1.15%, aluminium SAFcv1 dipped 0.45%, lead SPBcv1 shed 0.18%, tin SSNcv1 lost 0.7%, and zinc SZNcv1 dropped 0.52%.

Among other LME metals, copper CMCU3 was little changed, aluminium CMAL3 was flat, lead CMPB3 lost 0.1%, zinc CMZN3 slid 0.28% while tin CMSN3 added 0.13%.

($1 = 6.8374 Chinese yuan)