LONDON: Aluminium touched its highest price in more than three months on Thursday, supported by worries over potential shortages after the world's biggest producer of alumina announced a shutdown.
The gains, however, could be overdone because Norsk Hydro's closure of the Alunorte alumina refinery in Brazil may only be temporary, said Capital Economics analyst Ross Strachan.
"I'm wary of reading too much into the prospects on the aluminium side," he said.
Hydro said on Wednesday that it would halt production indefinitely and lay off 4,700 people at Alunorte, which has been operating at half of its capacity since March because of an environmental dispute.
"It almost makes you wonder if this is an attempt by the company to alleviate the situation by putting pressure on the government," Strachan said.
"You would think that there will be a resolution to facilitate at least a significant restart, even if it's not able to go back to full capacity."
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