August 9, 2018 / 11:04 AM / 4 months ago

METALS-Aluminium hits 6-week highs as supply fears revive

 (Updates with closing prices)
    By Peter Hobson
    LONDON, Aug 9 (Reuters) - Aluminium prices hit six-week
highs on Thursday after a strike at Alcoa's alumina refineries
in Australia and warnings of shutdowns by Rusal revived concern
about supply shortages.
    Benchmark aluminium on the London Metal Exchange (LME)
        ended down 1.3 percent at $2,078 a tonne on
profit-taking after the New York open. Earlier it touched
$2,147.50, its highest since June 29.
    It hit a 15-week low of $2,000.85 in late July on
expectations that the United States would allow aluminium made
by Rusal, the biggest producer outside China, to keep trading on
global markets and trade disputes would weaken metals demand. 
    But with the more than 60-million tonne a year aluminium
market expecting a deficit this year, investors are still wary
of output disruptions, said Societe Generale analyst Robin Bhar.
    "The fundamentals for aluminium are pretty tight," he said,
predicting a global aluminium shortfall of half a million tonnes
this year. 
    
    ALUMINIUM STOCKS: On-warrant stocks of aluminium available
to the market in LME-registered warehouses have fallen to
832,775 tonnes, the lowest since 2007, supporting prices.
MALSTX-TOTAL
    SPREAD: However, the discount for cash aluminium over the
three-month contract MAL0-3 this week grew to its biggest
since September last year, signalling that metal is available.
    TECHNICALS: Aluminium had hit its 50-day moving average at
$2,136 and was near its 200-day moving average at $2,167.
Convincing moves above these levels could trigger further
buying.  
    ALCOA STRIKE: A union said on Wednesday Alcoa        workers
had walked out at plants in Western Australia with capacity
equal to around 8 percent of the global supply of alumina, used
to smelt aluminium. Alcoa said it did not expect any immediate
impact on production.                          
    RUSAL: Sources close to Russia's Rusal           said the
company was concerned about impending catastrophe if U.S.
sanctions on it are not lifted, with some of its production
halted as early as September.             
    CHINA/TRADE WAR: China's stock markets and yuan gained on
Thursday, helping to lift industrial metals, even after China
the day before said it was slapping additional tariffs of 25
percent on $16 billion worth of U.S. imports, the latest step in
a worsening trade dispute. China is the world's biggest metals
consumer.                                
    CHINA FACTORIES: China's factory price inflation cooled in
July amid a slowdown in economic growth. Economists expect
punitive tariffs on U.S goods to push price growth higher in
months ahead.             
    PRICES: Copper         ended up 0.8 at $6,225 a tonne,
nickel         fell 1.2 percent to $13,885 a tonne, zinc        
gained 0.1 percent to $2,614.5, lead         slid 1.3 percent to
$2,108 and tin         added 0.9 percent to trade higher at
$19,570.

    
 (Additional reporting by Tom Daly and Pratima Desai; Editing by
Kirsten Donovan and Jan Harvey)
  
 
 
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