Aluminum gains to two-month high on power cuts; zinc advances
January 30, 2008 - 0:0
LONDON (Bloomberg) -- Aluminum rose to a two-month high in London, and lead and zinc also climbed, as power cuts disrupted production in South Africa and China.
China’s worst snowstorms in five decades have caused about 22.1 billion yuan ($3.07 billion) of economic losses, the Minister of Civil Affairs said. Snow has been falling in eastern, central and southern China since Jan. 10, affecting aluminum, zinc and lead producers. Power outages have reduced output in South Africa at smelters owned by BHP Billiton Ltd.“Aluminum is being hit in China and South Africa so it's pretty extensive,” said Dan Smith, an analyst at Standard Chartered Plc. in London. “There is some suggestion that up to 10 aluminum smelters were affected by the power shortage and problems with the snow in China.”
Aluminum for delivery in three months increased $53.30, or 2.1 percent, to $2,565.25 a metric ton as of 11:39 a.m. on the London Metal Exchange. Prices earlier climbed to $2,569, the highest intraday price since Nov. 20.
South Africa accounts for about 900,000 tons of annual aluminum production, Smith estimated. China's production last year was 12.6 million tons, according to figures on the London- based International Aluminium Institute’s website. Global output excluding China was 24.8 million tons, according to the institute.
BHP said its aluminum production in Mozambique was also reduced by power outages in South Africa. Aluminum output from Mozambique last year was about 550,000 tons, Smith estimated.
---------------------------------------Lower output
China's aluminum production will be reduced 300,000 tons, up from an earlier estimate of 200,000 tons, Beijing Antaike Information Development Co. said. Zinc and lead producers, including Zhuzhou Smelter Group Co., China’s largest zinc smelter, have probably reduced production as snowstorms led to power shortages and blockaded roads, Antaike analyst Feng Juncong said from Beijing.
Lead advanced $76 to $2,740 a ton on the LME and zinc increased $65 to $2,355 a ton.
Among other metals, copper rose $145 to $7,205 a ton and nickel gained $650 to $27,650 a ton. Copper stockpiles declined 400 tons to 171,275 tons, the lowest since Nov. 8, according to the LME’s daily warehouse report. Nickel stockpiles rose 108 tons to 46,914 tons, the highest since Jan. 11.