London aluminium prices on Wednesday held close a 13-1/2-year high hit in the previous session, supported by supply shortage concerns, even though the dollar ticked up and made the greenback-priced metal costlier for holders of other currencies.
Three-month aluminium on the London Metal Exchange was flat at $3,183 a tonne, as of 0735 GMT.
On Tuesday, prices had touched their highest since July 2008 at $3,236.
The most-traded March aluminium contract on the Shanghai Futures Exchange closed up 2.4% at 22,870 yuan ($3,594.22) a tonne, having earlier hit a peak since Oct. 22.
Aluminium prices jump to their highest since 2008
"A high energy price environment, coupled with decarbonisation policies, creates a challenging backdrop for aluminium supply growth," Standard Chartered said in a note.
Earlier this week, Slovak aluminium smelter Slovalco said it had cut output to about 60% of capacity because of the high cost of power and emissions allowances and a lack of government compensation.
On Tuesday, Goldman Sachs raised its aluminium price forecasts with a new 12-month target of $4,000 per tonne and said it sees prices averaging $3,450 in 2022.
Meanwhile, a rise in COVID-19 infections in major aluminium-producing Chinese city of Baise also stoked concerns of supply disruptions with curbs on transportation.
The dollar index rose 0.1% as investors awaited US inflation data due later this week for clues on the pace of Federal Reserve policy tightening.
Fundamentals
LME copper fell 0.5% to $9,735.5 a tonne, nickel rose 0.3% to $22,755 a tonne, lead was up 0.4% at $2,213, zinc was flat at $3,594.5 and tin edged up 0.3% to $43,045.
ShFE copper dipped 0.2% to 70,450 yuan a tonne, nickel fell 1.7% to 170,050 yuan, zinc fell 0.4% to 25,245 yuan, lead rose 1.3% to 14,995 yuan and tin was down 0.7% to 330,700 yuan.
Aluminium stocks in LME-registered warehouses have fallen to their lowest level since 2007 at 767,700 tonnes.
Aluminium production in the southwest Chinese city of Baise, which has gone into lockdown after recent COVID-19 outbreaks, remains stable though transportation disruptions are starting to weigh, the local industry association said on Tuesday.
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