Shanghai aluminium notches biggest gain since April on slim inventories
XLB•Shanghai aluminium futures rose 1.77% to 22,680 yuan a ton, after gaining as much as 2.65%, as exchange inventories remained limited. Stocks on the Shanghai exchange fell more than 30% last week to 132,605 tons, their lowest since January.
1. Prices rebound
The most-active December aluminium contract on the Shanghai Futures Exchange rose 1.77% to 22,680 yuan a ton, after gaining as much as 2.65% earlier in the session, its biggest intraday rise since April 16. The contract had fallen in the previous two sessions to an 11-month low.
2. Inventories remain tight
The November contract closed at a 355-yuan-per-ton premium over December. Shanghai exchange aluminium stocks fell more than 30% last week to 132,605 tons, their lowest since January. London Metal Exchange inventories have more than halved since the US-Israeli war against Iran, and what remained was mostly of Russian origin.
3. Demand and supply outlook
China's downstream buyers stepped up purchases after a recent price drop. Jinrui Futures analysts said tight nearby supplies and steep backwardation overseas could support a short-term rebound, while new smelting capacity coming online overseas and expectations of weaker demand could put increasing pressure on prices further ahead.
