Commodities

METALS-Soaring aluminium hits $3,000 for first time since 2008

Credit: REUTERS/CHINA STRINGER NETWORK

Aluminium prices rose to $3,000 a tonne for the first time since 2008 on Monday as restrictions on output in China, the biggest producer, fuel fears that supply will run short.

Updates throughout, changes dateline to LONDON

LONDON, Sept 13 (Reuters) - Aluminium prices rose to $3,000 a tonne for the first time since 2008 on Monday as restrictions on output in China, the biggest producer, fuel fears that supply will run short.

Prices of the lightweight metal used in packaging and construction have leaped 50% this year and 15% in only three weeks as speculators pile into the market.

The benchmark contract CMAL3 on the London Metal Exchange (LME) was up 0.7% at $2,943.50 a tonne at 1045 GMT after touching $3,000.

Factors fuelling the rally include the Chinese output cuts, a rapid increase in the price of alumina, from which aluminium is made, dwindling exchange stockpiles and strong demand, said Gianclaudio Torlizzi at consultants T-Commodity.

"It's very, very hard to be bearish," he said.

The pace of the rally means a correction is likely in the short term, he added, "but the trend is definitely higher".

CHINA: Yunnan province, home to about 10% of China's aluminium capacity, has told smelters using hydropower to keep average monthly output for September-December at August volumes or lower, a government document shows.

Yunnan aluminium smelters had already shut down nearly 1 million tonnes of annual capacity by August, researcher Antaike said this month.

ALUMINA: Futures of the aluminium ingredient on the Comex exchange AALc1 have surged 20% this month to $365 a tonne.

INVENTORIES: Aluminium inventories in LME-registered warehouses have fallen 33% since March to 1.3 million tonnes and stocks in Shanghai Futures Exchange (ShFE) stores have slumped 42% to 228,529 tonnes since April. AL-STX-SGH, MALSTX-TOTAL

POSITIONING: Speculators are betting on higher prices, raising their net long in LME aluminium to 35% of open contracts by Thursday, from 19% a week earlier, brokers Marex Spectron said.

MARKETS: Global equities slipped to 2-1/2 week lows and the dollar strengthened, pressuring metals, which are priced in the U.S. currency. MKTS/GLOB

OTHER METALS: LME copper CMCU3 was down 0.2% at $9,679 a tonne, zinc CMZN3 fell 0.7% to $3,097.50, nickel CMNI3 slid 2.5% to $19,890, lead CMPB3 was 1.9% down at $2,275 and tin CMSN3 fell 0.5% to $33,400.

(Reporting by Peter Hobson Additional reporting by Mai Nguyen and Tom Daly Editing by David Goodman )

((Peter.Hobson@thomsonreuters.com; +44 207 542 0083;))

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

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