Shanghai aluminium prices hit their highest in more than 13 years on Monday, boosted by Chinese supply worries and an upbeat sentiment after U.S. Federal Reserve Chairman Jerome Powell struck a more dovish tone in a long-awaited speech.
The most-traded October aluminium contract on the Shanghai Futures Exchange SAFcv1 rose as much as 3.2% to 21,355 yuan ($3,302.56) a tonne, its highest since Aug. 8, 2008, before easing slightly to trade at 21,280 yuan a tonne, still up 2.9% at 0250 GMT.
A prefecture in China’s Xinjiang region has imposed output limits on five aluminium smelters starting from August as part of efforts to stamp out illegal production. The move followed several aluminium output disruptions due to power curbs in China earlier this year.
China’s state planner, the National Development and Reform Commission, said on Friday it would encourage aluminium smelters in the country to increase their use of non-hydropower forms of renewable energy, such as wind and solar power, potentially disrupting a trend to move to hydropower-rich regions such as Yunnan.
Powell’s wait-and-see approach in his address on Friday gave investors and market participants some reassurance that the central bank’s extraordinary efforts to prop up the economy were likely to support riskier assets a while longer.
ShFE copper SCFcv1 rose 1.6% to 69,960 yuan a tonne, nickel SNIcv1 advanced 2.5% to 144,450 yuan a tonne, tin SSNcv1 increased 1% to 241,400 yuan a tonne, while lead SPBcv1 fell 0.4% to 15,315 yuan a tonne.
The London Metal Exchange is closed for a public holiday.
* Asian shares started the week with gains and the dollar was not far off two-week lows after Powell’s speech. MKTS/GLOB DATA/EVENTS (GMT)
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($1 = 6.4662 yuan)
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Shounak Dasgupta)