SINGAPORE- Shanghai aluminum prices rose to their highest in more than three months, underpinned by depleting stocks of the metal in exchange-tracked warehouses in China.
The most traded aluminum contract on the Shanghai Futures Exchange (ShFE) climbed 1 percent to 14,200 yuan ($2,017.36) a ton, its highest close since Sept. 12 and the third straight session of gains.
Aluminum stocks in warehouses tracked by ShFE dropped to 218,367 tonnes, their lowest since March 2017, exchange data showed.
“The ShFE market has rallied this week, on the back of declining exchange stocks. Looking ahead, heavy snow in northern areas (in China) has led to some logistical issues, which could see a further fall in ShFE stock levels,” ING said in a note.
A Singapore-based trader said demand for aluminum has been improving, lending support to prices of the metal used in construction, packaging and transportation. China is the biggest user and producer of aluminum.
Benchmark three-month aluminum on the London Metal Exchange (LME) was up 0.1 percent at $1,779.50 a ton, held back by higher inventories in LME-approved warehouses, where stocks were at their highest since May 2017. – Reuters