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The most-traded February aluminium contract on the SHFE stood at 13,860 yuan ($2,011) per tonne as at 10.12am Shanghai time, up by 70 yuan per tonne from Tuesday’s close.
The increases in aluminium prices are being supported primarily by news of production cuts at Chinese smelters, a Shanghai-based analyst told Fastmarkets MB.
Several of China’s top smelters have agreed to reduce their aluminium capacity by another 800,000 tonnes, Fastmarkets MB reported on Monday.
But gains remain fairly limited amid a challenging macroeconomic environment which continues to fuel risk-off sentiment in the market.
“The macro environment in the short term is bearish, and the recent price movement is associated with overall market sentiment. US equity markets have suffered collapses in the past three days, and the declines also extended into Chinese equities market, thus leading to risk-off sentiment [in wider markets],” Guotai Junan Futures said in a morning note.
“The aluminium price is currently stable, but [we] can’t be overly positive about this stability,” Guotai Junan Futures added.
The rest of the SHFE base metals complex exhibited mixed movements; copper was little changed, zinc registered marginal gains, while the rest weakened. Of those that fell, tin was down the most.
This weakness in tin prices comes despite reports of lower volumes of the metal being shipped to China.
According to the International Tin Association (ITA), the tin content of ore and concentrate shipments from Myanmar to China totaled around 4,000 tonnes in November, marking a 45% decline on a year-on-year basis and monthly increase of 29%.
Tin metal content for Myanmar-origin shipments totaled 49,800 tonnes in January-November, which is down 11% year on year due to a decline in tin ore grades, the ITA added.
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