LME Aluminium Recorded A New High since 2008

SHANGHAI, Feb 9 - LME aluminium futures hit a new high since 2008 amid investors’ concerns over tight supply and falling inventory.

As of 17:00 on 8 February London time (01:00 on 9 February Beijing time), LME three-month copper closed US$3.5/mt, or 0.04%, higher at US$9,781/mt. LME three-month aluminium rose 1.6% to US$3,183/mt.

The prices of lightweight metal, used for packaging and transport, has increased by around 14% since the beginning of this year after a 42% increase in 2021 as China restricted the production to reduce pollution. China offers more than half of the global supply of aluminium.

The recent outbreak of COVID-19 pandemic in the China aluminium producing city - Baise in Guangxi - has fuelled supply concerns.

Marubeni Corp said on Tuesday that aluminium stocks at Japan's three main ports rose 10.39% YoY to 296,500 mt at the end of December 2021, compared with 268,600 mt at the end of November.

Aluminium stocks in LME registered warehouses have fallen to 767,700 mt, the lowest level since 2007, from nearly 2 million mt in March last year.

Concerns over LME supply quickly raised the premiums of spot aluminium over three-month aluminium futures to US$40/mt, the highest level since July 2018.

Russia is an important aluminium producer. The threat of sanctions against Russia if it attacks Ukraine has aggravated the supply concerns. Slovak aluminium smelter Slovalco said on Monday it had cut the production to about 60% of capacity due to high-cost electricity and emissions subsidies and a lack of government compensation.

Mining activity at the Las Bambas copper mine in Peru has begun to decline significantly, according to electricity consumption data and information from a corporate source, after protesters blocked a major road at the end of last month. The copper mine accommodates 2% of global supply.