(Adds comment, updates prices)
By Eileen Soreng
Jan 6 (Reuters) – Shanghai aluminium prices hit a more than
two-month high on Thursday, driven by higher power prices and
rising supply concerns.
The most-traded February aluminium contract on the Shanghai
Futures Exchange closed 2% higher at 20,685 yuan a
tonne. Prices earlier hit the highest level since Oct. 27 of
20,835 yuan.
Three-month aluminium on the London Metal Exchange
was down 0.5% at $2,906.5 a tonne by 0710 GMT, but it was
trading closer to a more than two-month high touched on
Wednesday.
Aluminium is seeing a follow-through move from higher coal
prices, a Singapore-based trader said, adding, prices are
resilient due to fundamental support from supply deficit and
higher energy prices.
Chinese thermal coal futures was down 0.6% at 697.2
yuan a tonne, after rising about 5.5% earlier this week on
supply disruption fears following an export ban by Indonesia.
Most aluminium production in China uses electricity generated by
coal-fired power plants.
A surge in power and natural gas costs across Europe has
also led to output reductions at smelters in the region.
LME inventories of aluminium was last at
926,800 tonnes, down more than 50% since March 2021 high of 1.96
mln tonnes.
FUNDAMENTALS
* LME copper fell 1% to $9,604 a tonne, nickel
slipped 1.4% to $20,350, lead eased 0.2% to
$2.284, zinc was 1.1% lower at $3,548 and tin
was 0.3% lower at $39,180.
* Industrial metals came under pressure as the dollar firmed
after minutes from the U.S. Federal Reserve’s meeting signalled
a sooner-than-expected interest rates hike. [USD/]
* ShFE copper fell 1% to 69,490 yuan a tonne,
nickel slipped 2% to 149,930 yuan, lead fell
1.4% to 15,060 yuan and tin was up 0.1% at 295,350
yuan.
* Australian diversified miner South32 Ltd said it
would spend about $70 million to restart the Alumar aluminium
smelter in Brazil with its joint venture partner Alcoa Corp
.
* For the top stories in metals and other news, click
[TOP/MTL] or [MET/L]
($1 = 6.3715 Chinese yuan)
(Reporting by Eileen Soreng in Bengaluru; Editing by Sherry
Jacob-Phillips and Rashmi Aich)
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