LONDON: Aluminium prices climbed on Tuesday to their highest in more than a week on worries about output cuts in top producer China, though rising inventories capped gains.
Benchmark aluminium on the London Metal Exchange (LME) was 0.3% up at $2,465 a tonne at 1704 GMT after touching its highest since Feb. 10 at $2,485.
China’s Yunnan province has asked aluminium producers to reduce power consumption by 40-42% from September levels in the face of an ongoing supply crunch.
“Aluminium prices have been supported by the prospect of capacity curtailment in China due to power availability. This could see output cuts as seasonal demand starts to pick up in March,” said Sucden Financial analyst Geordie Wilkes.
Aluminium stocks in LME-registered warehouses have nearly doubled to 581,300 tonnes since Feb. 6. In warehouses monitored by the Shanghai Futures Exchange, aluminium inventories have jumped 360% since late December to 249,598 tonnes.
On the technical front, support for aluminium comes from the 200-day moving average around $2,245. Resistance is at $2,480, the 50-day moving average.
Meanwhile, copper was up 0.3% at $9,172.50 a tonne after touching its highest since Feb. 2 at $9,211.50. Copper has been under pressure from a stronger US currency, which makes dollar-denominated commodities more expensive for holders of other currencies. In other metals, zinc fell 0.5% to $3,110.50 a tonne, lead slipped 0.5% to $2,144, tin was up 3.1% at $27,530 and nickel gained 0.6% to $27,095.
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