SHFE Aluminium to Continue to Outperform LME Aluminium on Supply Disruptions

SHFE Aluminium to Continue to Outperform LME Aluminium on Supply Disruptions

SHANGHAI, Sep 6 (SMM) – SHFE aluminium climbed last week and is poised for further gains this week on supply concerns triggered by power curtailment in many parts of China.   

The most-traded SHFE 2110 aluminium contract hit a high of 21,550 yuan/mt last week, and is expected to climb further to 21,100-21,700 yuan/mt this week, while LME aluminium is expected to between $2,650-2,750/mt. The impact of power curtailment continues. Xinjiang is strictly controlling aluminium capacity in operation, while Guangxi has tightened power curtailment, intensifying concerns about the future aluminium supply. 

Market will continue to pay attention to the impact of electricity curtailment on aluminium supply. Some areas that fail to meet energy consumption requirements may face tougher electricity curtailment. The recovery of aluminium consumption will be relatively slow due to high aluminium prices, slowing down the decline in social inventory.