Aluminium rises on supply worries but weak demand limits gains
Aluminum prices rose on Thursday as supply concerns grew after Norsk Hydro said it would close a European smelter due to high energy costs, although weakening demand capped the metal’s gains.
Three-month aluminum on the London Metal Exchange rose 0.2% to $2,416.50 a tonne by 0233 GMT, and the most-traded September aluminum contract on the Shanghai Futures Exchange advanced 0.8% to 18,640 yuan ($2,748.37) a tonne.
Norsk Hydro said on Wednesday it would close its majority-owned primary aluminum facility in Slovakia by the end of September because of high electricity prices.
Aluminum, the most energy-intensive base metal to produce, has eased in recent months along with other industrial metals due to concerns about a global downturn hitting demand. LME aluminum has shed 41% from a record high hit in early March.
LME inventories of aluminum
Power controls in China amid its worst heat wave in 60 years have also sparked concerns about metal supply.
Aluminum maker Henan Zhongfu Industrial said it was suspending production this week as the southwestern Sichuan province ordered industrial users to suspend operations from Aug. 15 to Aug. 20 to prioritize residential power supply.
But a firm dollar, which makes metals traded in the U.S. currency more expensive to holders of other currencies, rising interest rates and weak global demand still weigh on the outlook for industrial metals.
ShFE copper shed 0.8% to 61,580 yuan a tonne, ShFE zinc dropped 2.8% to 24,880 yuan a tonne, lead declined 0.4% to 15,045 yuan a tonne and ShFE tin dropped 0.9% to 198,130 yuan a tonne.
LME zinc eased 0.4% to $3,498.50 a tonne, while copper rose 0.2% to $7,936 a tonne.
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($1 = 6.7822 yuan) (Reporting by Mai Nguyen in Hanoi; Editing by Subhranshu Sahu)