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METALS-Aluminium hits more than 10-year high as supply worries grow

METALS-Aluminium hits more than 10-year high as supply worries grow

reuters.com · 09/02/2021 02:32
METALS-Aluminium hits more than 10-year high as supply worries grow

Updates prices, adds analyst comment

- Aluminium prices hit a more than 10-year high on Thursday on concerns over supply of the energy-intensive metal, which were stoked further as several power plants in India were on the verge of running out of coal.

The inadequate coal supply in India, the second-biggest producer of primary aluminium after China, has raised concerns about a potential serious disruption in local aluminium production.

Benchmark three-month aluminium on the London Metal Exchange CMAL3 was up 1.2% at $2,722 a tonne, as of 0602 GMT, after touching $2,732.50 earlier in the session, its highest since May 2011.

The most-traded October aluminium contract on the Shanghai Futures Exchange SAFcv1 climbed 1.2% to 21,415 yuan ($3,314.50) a tonne. It hit a 13-year peak of 21,550 yuan on Monday, as production curbs in key Chinese smelting regions sparked fears of tight supply.

India has urged utilities to import coal to boost domestic supply of the fuel as coal-fired generation surged after an easing of coronavirus-related curbs.

"Aluminium supply faces growing risks due to tightness in Indian coal supply," ING commodity strategists said in a note.

The country's aluminium smelters had asked state-run Coal India Ltd COAL.NS, the world's largest coal miner, to restore supply, they said, citing media reports.

"So far there hasn't been a meaningful impact on India's aluminium supply, but the situation is worth monitoring," ING analysts said.

* Three-month LME copper CMCU3 rose 0.4% to $9,369 a tonne, as the dollar loitered around multi-week lows, making greenback-priced metals cheaper to holders of other currencies.

* Shanghai's most-active October copper contract SCFcv1 fell 0.9% to 68,960 yuan a tonne.

* China's State Reserve Bureau released its third batch of aluminium ingots into the market on Thursday, with a volume of 70,000 tonnes, slightly lower than the second batch, according to Chinese metals information provider SMM.

* LME nickel CMNI3 climbed 0.4% to $19,405 a tonne, but Shanghai nickel SNIcv1 dropped 1% to 146,850 yuan a tonne.

* For the top stories in metals and other news, click TOP/MTL or MET/L

($1 = 6.4610 yuan)

(Reporting by Enrico Dela Cruz in Manila; Editing by Shounak Dasgupta and Uttaresh.V)


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