Aluminium jumps on supply worries after report of China smelter blast, Auto News, ET Auto
Aluminium prices jumped on Friday on supply disruption worry after a smelter in China reportedly stopped production after an explosion.
An aluminium plant in China’s Yunnan province with annual capacity of 300,000 tonnes has stopped production after an explosion on Thursday evening, Shanghai Metals Market reported
The most-traded January aluminium contract on the Shanghai Futures Exchange rose as much as 3.2% to 19,180 yuan ($3,003.45) a tonne, while three-month aluminium on the London Metal Exchange advanced 2.1% to $2,670.50 a tonne by 0407 GMT.
Aluminium has been one of the hardest hit sectors by the recent China power curbs due to the metal smelting process’ high energy consumption.
The electricity curbs in China have slashed around 7% of domestic aluminium annual capacity so far this year, according to estimates from consultancy Wood Mackenzie.
The premium of LME cash aluminium over the three-month contract rose to $17 a tonne, the highest since Aug. 31, indicating tightening nearby supplies, as on-warrant inventories in LME warehouses fell to 587,900 tonnes, their lowest since December 2005.
Inventories in China , however, have risen slightly in recent weeks as the power shortage issues eased.