Shanghai aluminum rises 3% on supply issues and low inventories

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Feb 7 (Reuters) – Aluminum prices in Shanghai jumped 3% on Monday to a 3.5-month high after a week-long Lunar New Year holiday as the market was buoyed by supply issues and as stocks in London hit their lowest levels since 2007.

The most-traded aluminum contract in March on the Shanghai Futures Exchange rose 2.8% to 22,245 yuan ($3,497.48) a tonne, as of 0325 GMT. Earlier in the session, the contract hit 22,305 yuan, a high since Oct. 22 last year.

Three-month aluminum on the London Metal Exchange gained 1.6% to $3,121.5 a tonne, after hitting a high since Oct. 19.

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LME warehouse stocks stood at 775,475 tonnes, their lowest levels since February 2007.

Heightened tensions around Ukraine have also raised concerns over exports from Russia’s top aluminum producer, while the market is already reeling from smelter closures in China and Europe amid soaring electricity price. Read more

FUNDAMENTALS

* LME copper fell 0.2% to $9,824 a tonne, nickel rose 1.3% to $23,270, lead rose 0.9% to $2,207.5, zinc fell 0.1% to $3,609 and tin fell 0.1% to $42,990.

* Copper ShFE rose 0.4% to 70,750 yuan a tonne, nickel climbed 5% to 173,510 yuan, zinc fell 1% to 25,035 yuan, lead fell 2.7 % to 14,875 yuan and tin gained 3% to 334,310 yuan.

* Authorities in the aluminum center of Baise city in southwestern China’s Guangxi province have imposed restrictions that are among the toughest in the country’s toolbox to tackle the increase in local COVID-19 infections.

* MMG Ltd (1208.HK) said on Monday that production at its Las Bambas copper mine in Peru could stop by February 20 after a local community again blocked a road used by the miner, prompting the company to reduce its operations. Read more

* For top metal stories and other news, click or

MARKET NEWS

* Earlier in the session, the euro was close to Friday’s three-week high after the European Central Bank’s hawkish turn last week, but analysts said further near-term gains looked less likely with the imminent tightening of the Fed supporting the dollar.

* Asian stock markets mostly eased on Monday after incredibly strong U.S. jobs data eased concerns about the global economy, but also added risk of aggressive tightening from of the Federal Reserve.

DATA/EVENTS (GMT)

0700 United Kingdom House prices in Halifax MM Jan

0700 Germany Industrial production MM Dec

0745 France Reserve assets Total Jan.

1545 – ECB President Lagarde speaks at a regular hearing before the European Parliament’s Economic and Monetary Affairs Committee

($1 = 6.3603 Chinese Yuan)

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Reporting by Eileen Soreng in Bengaluru; Editing by Sherry Jacob-Phillips

Our standards: The Thomson Reuters Trust Principles.

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