Aluminium gains on concerns over the slow recovery in production in China’s Yunnan

Aluminium prices rose 0.36% Tuesday, finishing at 207.7, on concerns about the slow rebound in production in China’s Yunnan province. However, the upside was limited due to softer domestic monetary policy expectations and a stronger dollar. Investors remained cautious, anticipating signs of a resurgence in demand from China, the world’s largest metals buyer.

Worries about the slow pace of aluminium smelter rehabilitation in Yunnan province influenced market sentiment, as dry weather conditions continue to impede hydropower supply, reducing output capacity. Aluminium premiums in Japan have risen significantly, with a client agreeing to pay $145 per metric tonne over the benchmark price for shipments from April to June, a 61% increase over the current quarter.

According to figures from the International Aluminium Institute (IAI), global primary aluminium output increased 3.9% year on year in February to 5.544 million tonnes. Meanwhile, the share of available Russian aluminium stocks in LME-approved warehouses grew to 91% in February, showing a significant presence of Russian aluminium in the market. During the same period, the amount of Russian primary aluminium stocks on the LME warrant increased as well.

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