LME aluminum hits $3,000 for first time since 2008

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Benchmark London aluminum prices touched $3,000 a tonne for the first time in more than 13 years on Monday, driven by concerns over supply in China, the world’s biggest producer and consumer of the metal.

Southwest China’s Yunnan province, home to about a tenth of the country’s aluminum capacity, has told green aluminum smelters to keep their monthly output in September-December no higher than August levels, a government document shows.

Three-month aluminum on the London Metal Exchange (LME) was trading up 1.1% at $2,956.50 a tonne at 0820 GMT after hitting the $3,000 mark for the first time since July 2008.

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The most-traded October aluminum contract on the Shanghai Futures Exchange rose as much as 5.1% to 23,770 yuan ($3,683.27) a tonne, its highest since March 2008, before closing at 23,610 yuan.

Output curbs in China and political turmoil in Guinea – China’s top source of bauxite – have boosted aluminum prices by about 50% this year.

“Power shortages and environmental measures are restricting output in China. Political unrest in Guinea is also threatening to delay the huge pipeline of new bauxite projects that feed aluminum smelters in China,” ANZ analysts said in a note, estimating that more than 1 million tonnes of aluminum output have been disrupted in China this year.

FUNDAMENTALS

* ShFE aluminum inventories fell to 228,529 tonnes, their lowest since December 2020, while stocks of the metal in the LME warehouses have dropped 33% since March to 1.32 million tonnes.

* Copper inventories in ShFE warehouses fell to their lowest since December 2011 at 61,838 tonnes. Nickel stocks rose for the second straight week to 8,608 tonnes, but were still hovering near a record low of 4,455 tonnes.

* ShFE copper closed 2.5% up at 71,480 yuan a tonne while LME copper slipped 0.1% to $9,687.50.

* LME nickel fell 2.6% to $19,870 a tonne. ($1 = 6.4535 yuan) (Reporting by Mai Nguyen in Hanoi Additional reporting by Tom Daly Editing by Devika Syamnath and David Goodman)