Aluminium prices soar on LME, ShFe despite supply cuts in China

Onome Amuge

Aluminum prices reached a 9-1/2-year high on Tuesday, as supply concerns raised some dusts in China, the world’s leading producer, following an order by the Development and Reform Commission in Baotou, the capital city of Inner Mongolia, requiring aluminium processors to cut production in the region to meet its energy consumption targets for the first quarter.

The most-traded April aluminum contract on the Shanghai Futures Exchange rose as much as 2.6 per cent to settle at 17,980 yuan a tonne, a level unseen since August 2011, before contracting to close up at 17,630 yuan a tonne.

Also, the three-month aluminum price on the London Metal Exchange (LME)   saw a bullish outcome, climbing 0.4 per cent to $2,227 a tonne. Aluminum inventories in LME warehouses also hovered around their highest since March 2017, while stockpiles in ShFE warehouses reached a high unseen since April 2020.

However, aluminium for delivery in June took a downward turn on the Comex market in New York as futures slipped 1.27 per cent to $2.245 a tonne.

Reacting to the metal’s surge, Abdulnasser Kalban, chief executive officer, Emirates Global Aluminium PJSC, one of the world’s leading aluminium producers, said he expects prices to remain high this year as the global economy experiences a global recovery from the covid-19 pandemic while vaccine rollouts continue to support demand.

Kalban also maintained that positive market sentiment from late 2020 carried over to this year continues to retain a strong outlook and long-term positive expectations for the metal.