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| Aluminium heads for highest weekly gain in 21 yrs |
| Bloomberg / Jun 06, 2009, 00:39 IST |
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Aluminium rose in London, heading for the biggest weekly gain in 21 years, as inventory figures signaled a possible pick up in demand for the lightweight metal.
Aluminium earmarked for shipment from warehouses registered with the London Metal Exchange (LME) jumped almost 15 per cent to 81,375 tonnes, daily figures showed on Friday. That was the highest since April 17 and accounted for about 1.9 per cent of total inventories.
“Some distributors are showing renewed buying interest on concern that they will not be prepared to meet orders when demand returns,” Deutsche Bank analysts Michael Lewis and Joel Crane said.
Aluminium for three-month delivery added $24.50, or 1.6 per cent, to $1,589 a tonne at 1.12 pm local time on LME. The contract has added 10 per cent this week, closing in on the largest gain since June 1988, after sliding for three weeks.
Industries from packaging to aerospace, use aluminium, which has risen 3 per cent this year in London, the least among the LME’s six main metals. Copper has soared 64 per cent, and lead is up 66 per cent.
Aluminium futures open interest, or the number of contracts outstanding, rose to a record 829,336 lots as on Thursday, according to LME. The increase suggested investors were making purchases, which may represent new bets on higher prices, Deutsche Bank’s Lewis and Crane said.
Still, LME-monitored aluminium stockpiles have tripled in the past year. Supply will exceed demand by 380,000 tonnes this year, below 2008’s 1.29 million tonnes, according to the analysts.
“The world is swimming in excess aluminium,” Deutsche Bank said. United Co Rusal, the world’s largest producer of aluminium, said on June 3 it expects a “significant improvement” in the metal’s price from the third quarter as the global economy rebounds.
Copper for three-month delivery added $32.75 or 0.7 per cent, to $5,057.75 a tonne on LME, for a 4.7 per cent weekly gain. Copper for July delivery was little changed at $2.30 a pound on the New York Mercantile Exchange’s Comex division.
Stockpiles of the metal monitored by LME dropped 3,225 tonnes to 299,975 tonnes. Inventories tracked by the Shanghai Futures Exchange have jumped 15,263 tonnes, or almost 51 per cent, to 45,480 tonnes this week. Including Comex stockpiles, inventories totalled 396,999 tonnes, up one per cent for the week.
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