LONDON: Aluminium prices touched their highest in more than three years on Wednesday on concern about potential shortages after a smelter incident in Iceland.
Three-month aluminium on the London Metal Exchange was up 1% at $2,809 a metric ton by 1415 GMT after hitting $2,822, the highest since June 9, 2022.
A smelter in Iceland owned by Century Aluminum was forced to curtail production by two thirds due to an electrical equipment failure, the firm said late on Tuesday.
“The tight supply just underpins why the metal sector is still a go-to sector for investors,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“What we need to see today is whether we can gain a foothold above that $2,800 level. If so, then that area could become the new base for a move up towards $2,950.”
On Monday, data showed that global primary aluminium output in September edged up 0.9% year-on-year to 6.08 million tons amid a government cap on output in the world’s largest producer China.
“Outside of China, there have been few recent European or U.S. restart announcements, largely due to difficulties in securing long-term power contracts at viable prices,” ING analyst Ewa Manthey said in a note.
LME copper edged up 0.3% to $10,653 a ton as potential physical buyers recoiled at high prices after a rally fuelled by speculators.
“It’s actually a good thing that the copper price was corrected a little bit, as it could stir some real consumption from the downstream buyers. They were not buying at all previously,” a Shanghai-based copper trader said, requesting anonymity as he is not authorised to speak to the media.
The most-active copper contract on Shanghai Futures Exchange closed daytime trading down 0.13% at 85,420 yuan ($11,992.14) per metric ton.
LME zinc gained 1.2% to $3,023.50 a ton, while the premium of the cash LME zinc contract over the three-month forward -3 surged to a record high of $320 a ton, fuelled by a 85% tumble in LME inventories so far this year.
Among other metals, LME lead rose 0.4% to $1,992 a ton, while tin slipped 0.3% to $35,300 and nickel dipped 0.1% to $15,165.
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