Aluminum price soars as China cancels tax incentive on exports
The export tax rebate was also removed for copper and lowered for some refined oil, solar, battery and non-metallic mineral products.
Aluminum prices touched an 11-week high on Monday over concerns over slow recovery in production in China’s Yunnan province and supported by a strong technical outlook.
Three-month aluminum on the London Metal Exchange (LME) was up 0.4% at $2,318.5 a metric ton as at 1207 GMT, after touching $2,323, its highest since January 3.
It is the only metal registering gains in the LME base metals complex for the day.
The technical outlook for aluminum is positive after breaking above the major moving averages, Robert Montefusco at commodities brokerage Sucden Financial said.
“There are some catalysts from Yunnan’s production side. But I won’t say prices are getting carried away,” he added.
Montefusco cited market concerns about the pace of aluminum smelters in draught-hit Yunnan province restoring 500,000 metric tons of annual production, as dry weather continues to restrict hydropower supply.
Overall, base metals demand from top consumer China remains uncertain, he added, with the country’s purchasing managers’ index due this Sunday looking to shed more light on manufacturing activity.
“Copper is still finely balanced. Looking at stocks and production. Demand is not getting there yet,” Montefusco said.
Copper inventory in warehouses regisered with the Shanghai Futures Exchange (ShFE) fell slightly last week, after the strongest seasonal surge since 2020.
ShFE copper stocks jumped from just 30,905 metric tons at the end of December to 285,090 tons on March 22.
LME copper last eased 0.2% to $8,850.5 a ton, after gaining 5.7% last week. That was the biggest weekly gain for copper in over a year.
For other metals, LME nickel declined 1% to $17,065, zinc was down 0.2% at $2,479.5, lead dipped 0.4% to $2,028.5, and tin fell 0.2% to $27,675.
(By Julian Luk; Editing by Louise Heavens)
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