Shanghai aluminum prices held near their highest in more than 13 years on Wednesday amid trader concerns over possible supply disruption from major bauxite producer Guinea and tightness in top consumer China on logistics constraints.
Guinea is China’s biggest supplier of bauxite, an ore used to produce aluminum.
The most-traded October aluminum contract on the Shanghai Futures Exchange was up 0.8% at 21,910 yuan ($3,390.22) a tonne, as of 0447 GMT, and holding near its highest level since July 2008 of 21,980 yuan a tonne scaled on Monday.
Three-month aluminum on the London Metal Exchange rose 0.7% to $2,775.50 a tonne, hovering near its 10-year high levels hit on Monday of $2,782 a tonne. The contract has climbed 40% so far this year and is the second-best performer among the LME base metal complex after tin.
Aluminum prices for months have been supported by supply disruptions in top producer China, while the latest price rally was boosted by the political turmoil in Guinea, despite no immediate impact has been reported.
“Everyone is trying to get the earliest ship to avoid clashing with arriving just prior or during the National Day break, which results in unnecessary rental and delivery delays,” a Singapore-based trader said, adding that the Guinea unrest also boosted prices.
The coup on Sunday, in which President Alpha Conde and other top politicians were detained or barred from travelling, is the third since April in West and Central Africa, raising concerns about a slide back to military rule.
Chinese markets will be closed during Oct. 1-7 for a holiday.
Aluminum inventories in ShFE warehouses were last at 232,245 tonnes, their lowest since December 2020.
“By the end of this week, I think the flurry of (shipping) activity will die down,” the trader said.
(By Mai Nguyen; Editing by Sherry Jacob-Phillips)
Comments