Aluminium touches near two-year high on China optimism, copper up

Aluminium hit its highest level in nearly two years on Wednesday, supported by optimism that China would carry out plans to cut supply and by a rebound in the oil price. Three-month aluminium on the London Metal Exchange (LME) climbed 0.8 percent to close at $1,960 a tonne, its strongest since May 2015.
Copper ended up 0.6 percent to $5,907 per tonne. Zinc was at a one-week high, up 1.2 percent to $2,858, lead gained 0.9 percent to $2,350 and tin added 0.7 percent to $20,175. "As long as China follows through with this and takes its environmental concerns seriously, there is potential for aluminium to perform quite well," Nitesh Shah, a commodities analyst at ETF Securities, said.
China said it would require aluminium smelters to cut capacity by 30 percent over the winter heating months as part of its anti-pollution measures. Oil prices rose nearly 2 percent on Wednesday as US crude inventories rose less than expected, supply disruptions continued in Libya and the Opec-led output cut by producing countries looked likely to be extended.
Japan's aluminium premium for shipments during the April to June quarter has been set at $128 per tonne, up about a third from the quarter before due to higher overseas prices, five sources directly involved in the pricing talks said on Wednesday. Activity in China's manufacturing sector likely grew for an eighth straight month in March as a surprise rebound in the property market added to a construction boom, boosting sales of building materials from steel to cement, a Reuters poll showed.
The dollar pulled away from 4-1/2-month lows against a basket of currencies to a near one-week high. China's top copper smelters have agreed to an 11 percent cut in second-quarter treatment and refining fees, after disruptions at the world's two biggest copper mines curbed the global supply of raw material.
Regulatory delays to a proposal to slash initial clearing margins by the LME have dealt another blow to the exchange's ability to fend off competition from US rival CME Group, whose margins are sharply lower. Cash LME nickel fell to a $67 discount against the three month nickel contract, the steepest discount since Jan 2015, reflecting a market in ample supply.