Aluminium prices hit highest since 2008 on supply fears

Sep 17,2021

Aluminium prices climbed to their highest in more than 13 years on Monday, driven by concerns about oversupply in China, the world's biggest consumer and producer of the metal.

The most-traded October aluminium contract on the Shanghai Futures Exchange rose as much as 5.1 percent to 23,770 yuan ($3,683.27) a tonne, the highest level since March 2008.

Three-month aluminium on the London Metal Exchange (LME) hit its highest since July 2008 at $3,000 a tonne.

Output curbs in China and political turmoil in Guinea - China's top source of bauxite - have boosted aluminium prices by about 50 percent 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 aluminium smelters in China," ANZ analysts said in a note, estimating that more than 1 million tonnes of aluminium output have been disrupted in China this year.

State-backed Chinese research house Antaike this month said that the amount of annual aluminium capacity shut in China this year has exceeded 2 million tonnes and could rise further.

ShFE aluminium inventories fell to 228,529 tonnes, their lowest since December 2020, while stocks of the metal in the LME warehouses have dropped 33 percent 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 advanced as much as 3 percent to 71,800 yuan a tonne, its highest since Aug. 2, while LME copper increased 0.3 percent to $9,723 a tonne at 0551 GMT.

ShFE nickel edged up 0.1 percent to 152,480 yuan a tonne and LME nickel fell 0.8 percent to $20,230 a tonne while ShFE tin rose 1.4 percent to 257,450 yuan a tonne.

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