BEIJING: Shanghai aluminium prices breached the psychological 14,000 yuan ($2,093.61) a tonne barrier for the first time in four-and-a- half months overnight and extended gains on Thursday on improved outlook in China.
The 14,000-yuan mark is considered an average break-even for Chinese aluminium smelters, whose margins had been squeezed by a protracted price slump over 2018.
Analysts said aluminium was rising due to a brighter macro picture in China, the world's top metals consumer, which posted a better-than-expected 6.4 percent year-on-year growth in GDP in the first quarter, as well as improving demand in the peak second-quarter consumption season.
ICBC said recent data had reinforced its view that "green shoots" were emerging for China's industrial metals demand.
China's fixed asset investment was up 4 percent month-on-month after seasonal adjustment, the bank said in a note, which "should be a material contributor to marginal industrial metals demand over the coming quarter."
FUNDAMENTALS
ALUMINIUM: The most traded aluminium contract on the Shanghai Futures Exchange, for delivery in June, rose as much as 0.9 percent to 14,085 yuan a tonne, the highest since Dec. 3, and stood at 14,080 yuan by the end of the morning. Three-month aluminium on the London Metal Exchange edged up 0.1 percent to $1,851.
ALUMINIUM: China's aluminium production fell 3.6 percent on a daily basis in March from the previous two months to its lowest rate since October.
COPPER: Three-month LME copper slipped 0.4 percent to $6,528 a tonne, after closing 0.9 percent higher on Wednesday. ShFE copper was flat at 49,550 yuan a tonne.
OTHER METALS: Shanghai nickel and zinc fell 1.4 percent and 1.2 percent, respectively, mirroring a broad decline in the Chinese ferrous complex. Lead was also down, while tin was up 0.1 percent.
HOLIDAY: The LME will be closed on Friday and Monday for the Easter holiday.
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