Aluminum climbs to two-month high driven by energy prices, while copper falls

Aluminum prices rose to their highest in more than two months on Wednesday as expectations of large deficits were bolstered by high energy prices, particularly in Europe, and falling inventories.

Benchmark aluminum on the London Metal Exchange was up 1% at US $ 2,867 a ton, having previously touched US $ 2,880.5, its highest since October 26 and an increase of more than 10% since November 5 .

“There is no quick and permanent solution to the European energy crisis. Even if the prices soften, it does not mean that the risks will dissipate “said ING analyst Wenyu Yao.

“Aluminum producers in Europe trying to negotiate with energy suppliers will have a difficult time reaching long-term competitive deals”added.

At current prices, energy can account for around 50% of aluminum smelting costs.

In other base metals, copper was down 0.4% to US $ 9,728 a ton; zinc was down 0.1% at US $ 3,601; lead rose 0.6% to $ 2,311; tin was down 0.2%, at US $ 39,100; and nickel was down 2.3% at $ 20,640.