Copper gains 1% as shortage propels aluminum to 13-year highs

Aluminum prices rose to 13-year highs on Monday, driven by strong demand and severe shortages created by production limits imposed by China on highly polluting industries such as foundries to reduce energy use and emissions.

At 0955 GMT, benchmark aluminum on the London Metal Exchange (LME) was up 1.1% at $ 2,888 a tonne. Prices for the metal reached US $ 3,000 a ton last month, their highest since July 2008.

A broad energy crisis in China raised fears of a slowdown in growth and demand as the government focuses on limiting consumption by energy-intensive industries to reduce the impact on households.

Aluminum smelters can account for up to 7% of China’s total energy consumption, analysts say, and up to 40% of the metal’s production costs in the Asian country could be explained by energy.

“The history of aluminum is by no means over yet. China consumption may be slowing down, but the rest of the world remains in deficit”Said a fund manager.

On the other hand, copper prices improved 1% to US $ 9,225 a ton, supported by low inventories.

In other base metals, zinc rose 1.3% to US $ 3,022 a ton; lead amounted to 0.8%, at US $ 2,159; tin improved 0.7% to US $ 34,095; and nickel advanced 0.6% to US $ 18,075.