Aluminum recovers after hitting five-week low

By David Sheppard and Julie Crust

LONDON (Reuters) - Aluminum futures recovered from five-week low on Monday as mounting stocks of the metal heightened concerns that the market was oversupplied.

Copper bounced after last week's losses, with supply concerns supporting a market hit by fears of slowing demand, while lead rose more than 5 percent on falling stocks and a technical rally.

Aluminum fell to $3,014 a tonne, its lowest level since mid-June, before closing at $3,045 from $3,034 at the close on Friday.

Total primary Aluminum production in June was 2.121 million tonnes, compared with 2.189 million in May, data from the International Aluminum Institute (IAI) showed.

"The figures show that growth has fallen back a bit, but it is still quite strong," said David Thurtell, analyst at BNP Paribas.

Aluminum stocks at London Metal Exchange (LME) warehouses rose by 4,975 tonnes on Monday to stand at over 1.1 million tonnes, the highest level since May 2004. Stocks in Shanghai are at an all-time high of 189,904 tonnes.

"Perceptions of supply shortages in Aluminum -- not now but in the future -- are keeping prices supported, but we shouldn't be too worried when there are large builds in stocks," said Calyon analyst Robin Bhar.

The energy intensive metal, used in transport, power and packaging, has risen by 25 percent since the start of the year on supply concerns due to growing production costs and over outages in key producers.