BLBG: Aluminum Rises for 4th Day in London as Output Drops in China
Aluminum advanced for a fourth consecutive trading session in London after production declined in China, the world’s largest producer.
China’s Sichuan Aostar Aluminum Co. closed all its 250,000- metric ton capacity as prices slumped, the company said today. Global output fell 6.7 percent in November from a month earlier as production dropped to a 19-month low in China, according to the International Aluminium Institute.
“Production cuts, as reflected in the IAI data, have lent support to prices,” said Leon Westgate, an analyst at Standard Bank Plc in London.
Aluminum for delivery in three months added $10, or 0.6 percent, to $1,570 a metric ton as of 9:20 a.m. on the London Metal Exchange.
The metal, used in cars and beverage cans, has slumped 35 percent this year, triggering output cuts from North America to Asia. A 59 percent drop in oil prices this year will likely lower production costs, Westgate said.
There is also speculation that China’s state stockpile agency may buy the metal, the analyst said, citing a report in U.K. publication Metal Bulletin.
Production cuts have yet to be reflected in inventories, which are at a 14-year high. Stockpiles tracked by the LME rose 17,400 tons, or 0.8 percent, to 2.25 million tons, the exchange said today.
In Guinea, which has the world’s biggest reserves of bauxite used in aluminum production, the army suspended the constitution and dissolved the government. BHP Billiton Ltd. closed its office in the African country, where it is considering a $4.8 billion alumina refinery. United Co. Rusal and Alcoa Inc. run bauxite and alumina operations in Guinea.
Zinc stockpiles climbed 18,900 tons, or 8.1 percent, to 253,625 tons, the highest sine May 2006. It was the biggest advance in a year. The metal lost $8, or 0.4 percent, to $1,153 a ton on the LME.
Among other LME-traded metals, nickel slipped $50, or 0.5 percent, to $9,700 a ton and lead added $23, or 2.7 percent, to $889 a ton. Tin was unchanged at $9,950 a ton.
To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net
