By Mai Nguyen
Nov 5 (Reuters) – Shanghai aluminium prices dropped to a more than four-month low on Friday as rising coal output in China eased worries over disruptions to the metal’s production.
China is the world’s top producer of aluminium, the smelting of which is an energy-intensive process.
The most-traded December aluminium contract on the Shanghai Futures Exchange SAFcv1 tumbled as much as 7.5% to 18,470 yuan ($2,885.85) a tonne, the lowest since June 22.
Three-month aluminium on the London Metal Exchange CMAL3 dropped as much as 1.5% to $2,517 a tonne, its weakest level since Aug. 19.
China’s daily coal output hit 11.2 million tonnes on Wednesday, rising around 1 million tonnes from early October, close to a record high this year amid a raft of measures to ramp up production.
Thermal coal futures on China’s Zhengzhou Commodity Exchange CZCcv1 have plunged more than 50% from a historic high of 1,908.2 yuan per tonne logged on Oct. 19.
“The ongoing fall in coal prices in China amid stronger supply is likely to lower the risk of power shortages … Not only are the risks of disruptions lower, costs of smelting the metal have also declined significantly,” ANZ analysts said in a note.
FUNDAMENTALS
* Expectations that Russia will remove taxes on aluminium exports and boost global supplies have triggered an inventory sell-off that has slashed prices of the metal on the physical market in Europe and the United States.
* LME nickel CMNI3 rose 0.6% to $19,250 a tonne at 0521 GMT, ShFE copper SCFcv1 fell 0.9% to 69,640 yuan a tonne, ShFE zinc SZNcv1 declined 2.7% to 22,975 yuan a tonne and ShFE lead SPBcv1 shed 0.2% to 15,710 yuan a tonne.
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TOP/MTL or MET/L
($1 = 6.4002 yuan)
(Reporting by Mai Nguyen in Hanoi; Editing by Ramakrishnan M.)
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