LONDON: Aluminium prices touched a three-week high on Friday after China's output of raw material alumina slumped last month, highlighting the risk of tight supply due to power shortages.
Three-month aluminium on the London Metal Exchange had climbed 2.2% to $2,725 a tonne by 1100 GMT, the strongest since Nov. 26.
China's output of alumina - which is smelted to make aluminium - fell in November by 4.5% year-on-year to its lowest in 18 months, official data showed on Friday.
China aims to lower its carbon output by restricting the electricity consumption and production of power-intensive industries such as alumina refining and aluminium smelting.
Investors have refocused on potential shortages of industrial metals after being distracted recently by whether the US Federal Reserve would tackle rising inflation with faster bond tapering and interest rate rises next year, an analyst said.
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"The FOMC meeting on Wednesday created a relief rally across risky assets and that means the market can refocus on the internal fundamentals, which are generally supportive," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"Having survived another downside attempt, if we can hold these levels, then potentially we could be gearing up for some fresh upside as we head into 2022."
LME zinc edged up 0.3% to $3,430.50 a tonne, building on gains of 4.6% a day earlier when it touched a two-month high after Nyrstar said it planned to shut its French plant due to high European power prices.
Shanghai zinc prices ended more than 4% higher on Friday after scaling an over one-month peak.
The plant closure plans prompted analysts at Citi to raise their three-month zinc forecast to $3,700 per tonne from $3,350.
The premium of LME cash zinc over the three-month contract rose to $43 a tonne, up from $9.75 two days earlier, indicating tightening nearby supplies.
LME copper edged up 0.1% to $9,514 a tonne, nickel advanced 0.9% to $19,795 a tonne, lead climbed 0.8% to $2,325.50 and tin gained 1.6% to $39,310.
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