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London Aluminium Holds near 13-1/2-Year High on Supply Fears

Feb 9 (Reuters) - London aluminium prices on Wednesday held close a 13-1/2-year high hit in the previous session, supported by supply shortage concerns, even though the dollar ticked up and made the greenback-priced metal costlier for holders of other currencies.

Three-month aluminium on the London Metal Exchange was flat at $3,183 a tonne, as of 0735 GMT. On Tuesday, prices had touched their highest since July 2008 at $3,236.

The most-traded March aluminium contract on the Shanghai Futures Exchange closed up 2.4% at 22,870 yuan ($3,594.22) a tonne, having earlier hit a peak since Oct. 22.

"A high energy price environment, coupled with decarbonisation policies, creates a challenging backdrop for aluminium supply growth," Standard Chartered said in a note.

Earlier this week, Slovak aluminium smelter Slovalco said it had cut output to about 60% of capacity because of the high cost of power and emissions allowances and a lack of government compensation.

On Tuesday, Goldman Sachs raised its aluminium price forecasts with a new 12-month target of $4,000 per tonne and said it sees prices averaging $3,450 in 2022.

Meanwhile, a rise in COVID-19 infections in major aluminium-producing Chinese city of Baise also stoked concerns of supply disruptions with curbs on transportation.

The dollar index rose 0.1% as investors awaited U.S. inflation data due later this week for clues on the pace of Federal Reserve policy tightening.


* LME copper fell 0.5% to $9,735.5 a tonne, nickel rose 0.3% to $22,755 a tonne, lead was up 0.4% at $2,213, zinc was flat at $3,594.5 and tin edged up 0.3% to $43,045.

* ShFE copper dipped 0.2% to 70,450 yuan a tonne, nickel fell 1.7% to 170,050 yuan, zinc fell 0.4% to 25,245 yuan, lead rose 1.3% to 14,995 yuan and tin was down 0.7% to 330,700 yuan.

* Aluminium stocks in LME-registered warehouses have fallen to their lowest level since 2007 at 767,700 tonnes.

* Aluminium production in the southwest Chinese city of Baise, which has gone into lockdown after recent COVID-19 outbreaks, remains stable though transportation disruptions are starting to weigh, the local industry association said on Tuesday.

($1 = 6.3630 Chinese yuan)

Reporting by Eileen Soreng in Bengaluru; Editing by Shailesh Kuber and Subhranshu Sahu

Source: Reuters

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