• Copper stocks rise, weighing on prices
LONDON: Aluminium prices hit 17-month highs on Friday as robust demand from top consumer China, expectations of stronger growth and demand in the rest of the world and a lower dollar helped to create buying momentum.
Benchmark aluminium on the London Metal Exchange (LME) was up 0.7% at $1,865 a tonne at 1600 GMT. Prices of the metal used widely in the transport, construction and packaging industries earlier touched $1,872.5 a tonne, the highest since May 2019.
"The macro picture is positive, the dollar is weaker and demand from China has been very strong," said Richard Fowler, strategist at broker Simpson Spence Young.
"We did run into some producer hedging a while back, but we are in a fairly strong uptrend."
China's imports of unwrought aluminium and aluminium products in August were the highest in more than 11 years at 429,464 tonnes, having stood at 119,145 tonnes in May.
"The September import figures are not yet available, but anecdotal evidence suggests total imports during September could remain elevated," ING analyst Wenyu Yao said in a note.
"Inventories in China have turned largely flat after a significant drawdown during the second quarter. Current inventories are 25% lower than the same period last year and are well below the five-year average."
Stocks of aluminium in warehouses monitored by the Shanghai Futures Exchange have reached 247,965 tonnes, compared with numbers above 530,000 tonnes in March.
A lower US currency makes dollar-denominated commodities cheaper for holders of other currencies, which could boost demand and prices.
Stronger manufacturing activity and new orders in the world outside China, as seen in surveys of purchasing managers, are soon expected to feed through to higher demand for industrial metals.
Rising copper inventories in LME-registered warehouses are weighing on prices, which are down 0.1% at $6,739 a tonne.
Zinc was up 0.4% at $2,435, lead slipped 0.9% to $1,756, tin was little changed at $18,365 and nickel was up 1.5% at $15,650.