LONDON: Aluminium prices rose on the London Metal Exchange (LME) on Tuesday, while prices on the Shanghai Futures Exchange (SHFE) fell as the market digested China’s plan to remove a tax refund on exports of some aluminium products.
Three-month aluminium on the LME was up 1.0% at $2,632 a metric ton by 1602 GMT. The most-traded SHFE December aluminium contract closed down 0.4% at 20,470 yuan ($2,827.5) a ton.
China’s Friday announcement that it would cancel a 13% export tax refund for aluminium semi-manufactured products from Dec. 1 inflated concerns that global supplies would tighten up and leave more of the product inside the country.
“In the near term, the cancellation of rebates will make Chinese aluminium (products) more expensive on the international market and could lead to a reduction in export volumes,” said Ewa Manthey, a commodities analyst at ING.
LME aluminium, however, will struggle to hold on to the price rally, which saw it hitting $2,730 on Friday, until some physical demand picks up, said a trader.
Base metals came under pressure on Tuesday afternoon as some investors rushed to safe-haven assets due to signs of escalating tensions between Russia and the United States over Ukraine.
Most of the metals, however, recovered as geopolitical fears eased after the White House said the US was not surprised by Russia lowering its threshold for a nuclear strike and does not plan to adjust its own nuclear posture in response.
Both LME copper and zinc were steady at $9,072 and $2,952 per ton, respectively, while nickel rose 1.5% to $15,970 and tin eased 0.4% to $28,885.
Lead rose 0.6% to $2,002.50 shrugging off the second day of an inflow of the metal to the LME-registered warehouses which drove lead inventories to their highest in 11-1/2 years.
Source: Brecorder
