Aluminum prices on the Shanghai Futures Exchange rose after Rio Tinto Group said the worst storms in 50 years would reduce China's output of the lightweight metal. Copper prices also gained.
China may lose 650,000 metric tons of aluminum output from snowstorms that hit central and southern regions, Rio's Chief Executive Officer Tom Albanese said in London on Wednesday, citing figures from CRU International Ltd.
"Investment funds must have poured in, betting lost output is bullish for prices," Li Ling, a trader at Minmetals Starfutures Co, told Bloomberg News by phone from Shanghai yesterday. Demand from processors may be curbed as users "are not used to" the high prices, she added.
Aluminum in Shanghai for April delivery rose as much as 700 yuan, or 3.7 percent, to 19,750 yuan (US$2,747) a ton and closed at 19,580 yuan. Aluminum for three-month delivery on the London Metal Exchange advanced 2.7 percent to US$2,764 a ton at the same time.
Metal for immediate delivery in Changjiang, Shanghai's biggest cash market, rose 110 yuan, or 0.6 percent to 19,370 yuan a ton yesterday.
Aluminum Corp of China Ltd, the nation's biggest producer of the metal, returned one percent of the combined capacity of its smelters in the southern province of Guizhou after power was restored, the firm said in a statement on its Website yesterday. It would take "months" to reach full production, Zhang Qing, a company spokeswoman said in Beijing yesterday.
Chinese zinc and copper producers have resumed output and deliveries hampered by snowstorms.
Zhuzhou Smelter Group Co, the country's largest zinc firm, restored output to "normal level" from February 6, it said yesterday.
(Shanghai Daily, February 15, 2008)