MANILA (Jan 25): London aluminium futures edged higher on Wednesday to trade close to a 20-month high on Wednesday, buoyed by reports of possible capacity cuts in China, while copper rose to its strongest level in almost two months.

Three-month aluminium on the London Metal Exchange was up 0.4 percent at $1,875 a tonne by 0703 GMT. The metal on Tuesday touched its highest level since May 2015 at $1,883.

Traders cited a Bloomberg story saying that China is drawing up plans that would halt about 3.3 million tonnes of operational aluminium capacity during the winter to combat air pollution.

There has been no official government confirmation of the plan, but CRU analyst Jackie Wang in Beijing estimated closures could happen in Shandong, Henan, Shanxi and Hebei, potentially halting a total of 2.3 million tonnes in aluminium production.

"We assume this will happen in November and that will impact two months this year and three months next year," said Wang. "As far as we know the Ministry of Environmental Protection is trying to consult the industry to see if it's possible to do such a thing."

China is boosting efforts to fight smog and has ordered curbs in heavy industries, including shutting producers of substandard steel products by the end of June.

Aluminium on the Shanghai Futures Exchange rose 2.3 percent to close at 14,050 yuan ($2,042) a tonne.

LME copper was flat at $5,945 a tonne, after peaking at $5,959.50 earlier in the session, its loftiest since Dec. 5.

Tracking gains in its London counterpart, the most-traded March copper contract in Shanghai rose 1.7 percent to 47,650 yuan a tonne.

Unionised workers at BHP Billiton-run Escondida, the world's biggest copper mine, said they rejected the company's latest wage offer and asked workers to vote for a strike and prepare for an extended conflict.

LME zinc eased 0.4 percent to $2,815 a tonne, after touching a nearly six-week peak of $2,830 overnight.