SHANGHAI: Shanghai aluminium prices climbed on Monday to their highest in more than 13 years on supply worries in China and upbeat sentiment after US Federal Reserve Chairman Jerome Powell struck a more dovish tone in a long-awaited speech.

The most-traded October aluminium contract on the Shanghai Futures Exchange rose as much as 4.2% to 21,550 yuan ($3,332.41) a tonne, its highest since Aug. 1, 2008, before easing slightly to close at 21,495 yuan a tonne, still up 3.9%.

A prefecture in China’s Xinjiang region has imposed output limits on five aluminium smelters starting from August as part of efforts to stamp out illegal production. The move followed several aluminium output disruptions due to power curbs in China earlier this year.

“The output of electrolytic aluminium in August may decline due to the dual control of domestic electricity curtailment and energy consumption,” Huatai Futures said in a report.

Powell’s wait-and-see approach in his address on Friday gave investors and market participants some reassurance that the central bank’s extraordinary efforts to prop up the economy were likely to support riskier assets a while longer.

ShFE copper rose 1.8% to 70,130 yuan a tonne, tin increased 2.4% to 244,850 yuan a tonne, while lead fell 1.1% to 15,210 yuan a tonne.

The London Metal Exchange is closed for a public holiday.

FUNDAMENTALS

ShFE nickel hit a two-week high of 147,860 yuan a tonne as inventories in ShFE warehouses hit a record low of 4,455 tonnes, while LME stockpiles fell to their lowest since January 2020 at 195,252 tonnes.

“The output of stainless steel is still at a high level, and the consumption of refined nickel is relatively good. The shortage of (nickel) supply has led to continuous destocking,” Huatai Futures said in another report.