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Shanghai aluminium futures hit 7-month high amid supply shortage in China
SHANGHAI aluminium futures prices on Thursday hit their highest since October 2018 on worries over a supply shortage, following a refinery shutdown in China - the world's top aluminium maker.
Xinfa Group, one of China's biggest aluminium smelters, is closing all production lines on its 2.8-million-tonne-per-year alumina refinery in Shanxi for an unidentified period, amid an environmental dispute, causing alumina prices to spike.
The most active aluminium contract on the Shanghai Futures Exchange rose as much as 0.5 per cent to 14,395 yuan (S$2,865) a tonne in early Asian trading hours. It ended up 0.4 per cent, marking the fifth straight session of gains.
Alumina is a substance used to make aluminium.
"Alumina price has increased a lot this week and likely to remain high, which gives support to the aluminium price. Mid-term demand will still be a key factor worth-monitoring," said analyst Jackie Wang of metals consultants CRU based in China.
While all Shanghai metals rose following an overnight rally in London, sentiment on the London Metal Exchange was cautious for most metals after China released weaker-than-expected retail sales and industrial output data for April.
The figures for April largely pointed to a loss of momentum, after surprisingly upbeat March readings had raised hopes the economy was slowly getting back onto a firmer footing and would require less policy support.
An expected US decision to delay imposing tariffs on imported cars and parts helped sentiment.
Three-month copper on the London Metal Exchange was almost unchanged at US$6,083 a tonne, while aluminium edged up 0.2 per cent and nickel was trading 0.5 per cent lower.
Shanghai copper rose 0.4 per cent to 47,790 yuan a tonne, nickel was up 1.2 per cent, while zinc advanced 1.3 per cent, lead increased 2 per cent and tin edged 0.5 peer cent higher.
A Brazilian court also lifted one of two production embargoes on Norsk Hydro's Alunorte, the world's top alumina refinery, but output remains curtailed at 50 per cent capacity as the remaining embargo still remains.
State miner Codelco, the world's top copper producer, said on Wednesday it has agreed on a new labour contract with the union of supervisors at its small Salvador mine in northern Chile.
The US Interior Department on Wednesday renewed two long-mothballed leases in Minnesota, a key step in opening up the area to copper mining despite heavy opposition from local and conservation groups.
Mexico is close to resolving its dispute with the United States over steel and aluminium tariffs without quotas but hopes Canada can reach a similar agreement before completing it, a senior Mexican official said on Wednesday. REUTERS