Home Business Shanghai aluminum up on supply woes; London at 3-year high

Shanghai aluminum up on supply woes; London at 3-year high

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Shanghai aluminum prices rose on Friday, hovering near a 11-year high, on supply worries in China amid a fresh round of electricity restrictions in major producing province of Yunnan.

The most-traded September aluminum contract on the Shanghai Futures Exchange closed up 2.6% at 20,085 yuan ($3,108.94) a tonne, near a January 2010 high of 20,530 per tonne.

Three-month aluminum on the London Metal Exchange rose as much as 0.5% to $2,605.50 a tonne, its highest since April 2018 and on track for its sixth straight monthly gain.

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“(Prices are rising) because of Yunnan’s electricity control,” said a Singapore-based trader.

Aluminum producers in Yunnan province received a notice from local authorities to restrict their power consumption, with aluminum smelter Yunnan Shenho – a unit of China’s Henan Shenhuo Coal & Power Co Ltd – set to miss its 2021 output target due to the power cut.

FUNDAMENTALS

* Aluminium inventories in ShFE warehouses were last registered at 266,666 tonnes, hovering near their lowest level since Feb. 5. Stockpiles of the metal in LME warehouses have dropped by nearly a third since March to 1.4 million tonnes.

* The premium of LME cash aluminum over the three-month contract stretched to $17.65 a tonne, the biggest since December 2019, indicating tightening nearby supplies.

* LME copper fell 0.4% to $9,786 a tonne at 0706 GMT, nickel shed 0.5% to $19,740 a tonne, ShFE copper edged up 0.4% to 71,820 yuan a tonne and ShFE zinc rose 0.9% to 22,495 yuan a tonne.

* Workers at Chile’s Andina copper mine operated by state-owned Codelco turned down the firm’s offer for a new collective contract on Thursday, paving the way for a potential strike at the facility, the union told Reuters.

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($1 = 6.4604 yuan)

(Reporting by Mai Nguyen in Hanoi; editing by Amy Caren Daniel and Jason Neely)