LONDON, Aug 14 (Reuters) – Aluminium was the standout performer among the major industrial metals last week. On the London Metal Exchange (LME) three-month metal jumped by more than 7 percent to reach its highest in nearly three years at $2,048 a tonne.
China outdid even that, with the most actively traded contract on the Shanghai Futures Exchange (ShFE) hitting a five-year high of 16,480 yuan a tonne amid an explosion in trading volumes and open interest. There is much speculative froth in these moves, particularly in Shanghai, but there is also a collective attempt to reassess this market’s supply risks.
China has embarked on a policy of closing “illegal” smelter capacity, meaning that which has been constructed without the full gamut of official approvals. This being China, the largest producer of aluminium in the world, there are big implications for supply. Continue Reading →