Aluminum climbs

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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 percent to $2,416.50 a ton and the most-traded September aluminum contract on the Shanghai Futures Exchange advanced 0.8 percent to 18,640 yuan ($2,748.37) a ton.

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 percent from a record high hit in early March.

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LME inventories of aluminum tumbled to 276,875 tons from 1.97 million tons in March 2021. ShFE aluminum stockpiles dropped to 178,736 tons, almost half the level seen in March 2022.

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 US 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 percent to 61,580 yuan a ton, ShFE zinc dropped 2.8 percent to 24,880 yuan a ton, lead declined 0.4 percent to 15,045 yuan a ton and ShFE tin dropped 0.9 percent to 198,130 yuan a ton.

LME zinc eased 0.4 percent to $3,498.50 a ton, while copper rose 0.2 percent to $7,936 a ton. — Reuters

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