Early Chinese output cuts boost metals
“LME Aluminium prices jumped to fresh five year highs of $2191.5/t while MCX Aluminium prices touched Rs.139.2/kg, highest level since 2006 on reports that two companies in Henan province in China have started with output cuts much before the official winter restrictions. According to the report, Chinalco, China’s largest state-run aluminium producer, and Jiaozuo Wanfang were to start reducing production by more than 30 percent ahead of time on 19th Sep’17 and will last until March 15, 2018 while the official curtailment period runs from 15th Nov’17 – 15th Mar’18. This pushed Shanghai Aluminium prices to 17055 Yuan per tonne, highest since 2011.
Nickel prices too joined in the rally with around 3 percent upside on both LME and MCX following latest report by the International Nickel Study Group (INSG). As per the INSG report, global nickel market slipped into a wider deficit of 4,700 tonnes in July’17 compared to a 400 tonne shortfall in June’17 boosted by rising Chinese Stainless Steel demand. The global deficit for refined nickel widened to 39,700 tonnes in the first seven months of the year from 36,800 tonnes in the first half.
Other base metals, Copper, Zinc and Lead too, are trading higher today ahead of the crucial FOMC statement release due tonight.”