* LME aluminium stocks at lowest since last May
* Rusal sanctions relief widely expected, priced in
* Aluminium mkt in deficit, demand set to improve (Adds closing prices, details)By Maytaal AngelLONDON, Jan 29 (Reuters) - Aluminium prices rose on Tuesdayas investors saw the previous session's 2.8 percent drop asoverdone given falling stockpiles and efforts by top consumerChina to stimulate growth.
The United States said on Monday it would lift sanctions onaluminium Russian producer Rusal , while the LondonMetal Exchange (LME) said it would resume accepting all Rusalmetal into its warehouses. While the move means unsold Rusal material could hit themarket, balances are tightening overall, as reflected by fallingstocks. Investors are also counting on more stimulus from Chinaafter the Chinese New Year break in February.Aluminium stocks in LME approved warehouses stand at 1.3million, near their lowest since May 2018, while stocks inShanghai Futures Exchange (ShFE) warehouses are at 690,000tonnes, down 30 percent since last May.Oliver Nugent, commodity strategist at Citi, said China hadcut three million tonnes of aluminium capacity last year andstocks were now being drawn, adding that demand would likelyimprove after the Chinese new year thanks to stimulus measuresfrom Beijing.
* LME ALUMINIUM: Three-month LME aluminium ended up1.5 percent at $1,894 a tonne, bringing gains for the year toaround 2.5 percent. Aluminium ended 2018 down 18.6 percent onbets the Rusal sanctions would be lifted and on U.S.-China tradetensions.
* OPEN INTEREST: Indicating potential short covering ahead,aluminium exhibits the largest short in the base metals complex,equivalent to 22 percent of open interest, according to brokerMarex Spectron.
* CHINA-GROWTH: China on Tuesday unveiled measures aimed atspurring sales of items ranging from cars and appliances toinformation services, as the world's second-largest economygrows at its slowest pace in nearly 30 years.
* ALUMINIUM DEFICIT: "We remain of the view that, with themarket in heavy deficit and demand set to improve, the skew ofprice risk into mid-year is to the upside," BMO Capital Marketssaid in a note.
* U.S.-CHINA: The United States on Monday announced criminalcharges against Chinese telecoms giant Huawei, escalatingtensions with Beijing just days before trade talks between thetwo countries.
* CHINA-POLL: Activity in China's vast manufacturing sectorlikely shrank for the second straight month in January.
* POLAND COPPER:Nine miners are missing after an earthtremor struck KGHM Polska Miedz's mine near the Polishtown of Rudna.
* OTHER METALS: Copper ended up 0.8 percent at$6,050 a tonne, zinc ended down 0.9 percent at $2,656, leadclosed down 0.1 percent at $2,075, tin closed up 0.1percent at $20,675 while nickel closed up 2.5 percent at$12,120, having hit its highest since last October.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Top base and precious metals analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Tom Daly; editing by EmeliaSithole-Matarise/Louise Heavens/Alexander Smith)
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