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(Updates throughout, date changes in LONDON)
LONDON, Sept. 13 (Reuters) – Aluminum prices hit $ 3,000 a tonne for the first time since 2008 on Monday, as production restrictions in China, the largest producer, fueled fears of a shortage of ‘supply.
Prices for light metal used in packaging and construction have jumped 50% this year and 15% in just three weeks as speculators rush into the market.
The benchmark London Metal Exchange (LME) contract was up 0.7% to $ 2,943.50 per tonne at 10:45 a.m. GMT after hitting $ 3,000.
Factors fueling the rally include Chinese production cuts, a rapid rise in the price of alumina, from which aluminum is made, declining stock market stocks and strong demand, said Gianclaudio Torlizzi of consultants T- Commodity.
“It’s very, very difficult to be bearish,” he said.
The pace of the rally means a correction is likely in the short term, he added, “but the trend is definitely up.”
CHINA: Yunnan province, home to around 10% of China’s aluminum capacity, has asked hydropower-using smelters to keep average monthly production from September to December at volumes of August or less, according to a government document.
Yunnan aluminum smelters had already closed nearly a million tonnes of annual capacity in August, researcher Antaike said this month.
ALUMINE: Futures on the aluminum ingredient on the Comex exchange jumped 20% this month to $ 365 per tonne.
STOCKS: Aluminum stocks in LME-registered warehouses have fallen 33% since March to 1.3 million tonnes and stocks in Shanghai Futures Exchange (ShFE) stores have fallen 42% to 228,529 tonnes since April . AL-STX-SGHMALSTX-TOTAL
POSITIONING: Speculators are betting on higher prices, taking their net long position in LME aluminum to 35% of open contracts by Thursday, from 19% a week earlier, brokers Marex Spectron said.
MARKETS: Global stocks slipped to 2.5-week lows and the dollar strengthened, putting pressure on metals, which are priced in US dollars.
OTHER METALS: LME copper fell 0.2% to $ 9,679 per tonne, zinc fell 0.7% to $ 3,097.50, nickel slipped 2.5% to $ 19,890, lead fell 1.9% to $ 2,275 and tin fell 0.5% to $ 33,400.
Reporting by Peter Hobson Additional reporting by Mai Nguyen and Tom Daly Editing by David Goodman
Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.
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