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Aluminium Prices Hits Two Week High As China Unveils Rate Reforms

Metal News - Published on Wed, 21 Aug 2019

Image Source: DepositPhotos
Aluminium touched its highest in more than two weeks on Monday and copper also gained after China unveiled interest rate reforms that may boost the economy of the top metals consumer. The move by China, which also fuelled hopes of interest rate cuts, triggered short-covering and came on top of fears of aluminium shortages due to flooding in Shandong province in China, a big producer of the lightweight metal, traders said.

China’s central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies and support the slowing economy. Mr Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen said that “We can see the market is responding (to China’s moves), bond yields are trading a tad higher, stocks are higher, and it’s creating short covering in base metals.” He added that “In copper, the fact that we hit a record short two weeks ago and then had a failed break to the downside, that does inject some hesitation in people getting aggressively short at these levels.”

Benchmark aluminium on the London Metal Exchange was up 0.3% at USD 1,798 a tonne by 1035 GMT, after touching USD 1,807.50, the highest since July 31.

ALUMINUM: Investors are still concerned about potential disruption from flooding in China’s eastern province of Shandong, the smelting heartland of the country, broker Marex Spectron said in a note.

The floods followed typhoon Lekima which struck last week, racking up billions of dollars in economic losses and widely disrupting travel.

China Hongqiao Group, the world’s top aluminium producer, said on Aug. 13 it was operating as normal after the typhoon lashed its home province Shandong.

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Posted By : Amom Remju on Wed, 21 Aug 2019
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