Commodities

METALS-Aluminium hits more than 10-year high as supply fears grow

Credit: REUTERS/ALEXANDROS AVRAMIDIS

Aluminium prices hit their highest in more than 10 years on Thursday as concerns over supply of the energy-intensive metal were stoked further by coal shortages at several power plants in India.

Updates prices

Sept 2 (Reuters) - Aluminium prices hit their highest in more than 10 years on Thursday as concerns over supply of the energy-intensive metal were stoked further by coal shortages at several power plants in India.

The coal shortages in India, the second-biggest producer of primary aluminium behind China, have raised concerns about potentially serious disruption to domestic aluminium output.

Benchmark three-month aluminium on the London Metal Exchange (LME) CMAL3 was up 1.4% at $2,727.50 a tonne at 0700 GMT, having touched its highest since May 2011 at $2,734.50.

The most-traded October aluminium contract on the Shanghai Futures Exchange SAFcv1 ended daytime trading 1.4% up at 21,460 yuan ($3,321.11) a tonne. It scaled a 13-year peak of 21,550 yuan on Monday as production curbs in key Chinese smelting regions sparked supply fears.

India has urged utilities to import coal to boost domestic supply of the fuel after coal-fired power generation surged with the easing of measures to contain the COVID-19 pandemic.

"Aluminium supply faces growing risks due to tightness in Indian coal supply," ING commodity strategists said in a note.

The country's aluminium smelters had asked state-run Coal India COAL.NS, the world's largest coal miner, to restore supply, they said, citing media reports.

"So far there hasn't been a meaningful impact on India's aluminium supply, but the situation is worth monitoring," ING analysts said.

* Three-month LME copper CMCU3 rose 0.4% to $9,370 a tonne, as the dollar loitered around multi-week lows, making greenback-priced metals cheaper for holders of other currencies.

* Shanghai's most active October copper contract SCFcv1 fell 0.8% to 69,020 yuan a tonne.

* China's State Reserve Bureau released its third batch of aluminium ingots into the market on Thursday, with the 70,000 tonnes volume slightly lower than the second batch, according to Chinese metals information provider SMM.

* LME nickel CMNI3 firmed by 0.4% to $19,400 a tonne while Shanghai nickel SNIcv1 dropped 1% to 146,890 yuan.

* For the top stories in metals and other news, click TOP/MTL or MET/L

($1 = 6.4610 yuan)

(Reporting by Enrico Dela Cruz in Manila Editing by Uttaresh.V and David Goodman)

((enrico.delacruz@tr.com))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More