BY ONOME AMUGE
Aluminium prices traded higher on worries about supply of the energy-intensive metal after Russia’s Gazprom, one of the largest publicly listed natural gas companies in the world, halted gas supplies to Poland and Bulgaria.
As a result, aluminium, which needs huge amounts of power in the smelting process, has seen curtailments of operations impacted by surging energy prices.
Benchmark three-month aluminium on the London Metal Exchange (LME) rose 0.9 percent to $3,120 a tonne.
Gianclaudio Torlizzi, partner at consultancy T-Commodity in Milan, Italy, said increasing tension over the energy sector will continue to offer long-term support to aluminium.
Torlizzi, who posited that the fundamentals for the lightweight metal are solid, added that the termination of gas supplies to two European countries has triggered concerns that more states could be hit by similar fate, especially Germany.
Meanwhile, analysts observed that extended lockdowns in top metals consumer China in its battle against COVID-19, has fanned worries about overall metals demand as the country’s yuan currency slipped to nearly 17-month lows against the U.S. dollar which is currently at its strongest monthly valuation in seven years.
“A weakening yuan is bearish for base metals and there’s expectation that the yuan can weaken a bit more, so that will continue to pressure base metals,” Torlizzi said.
For the week, base metals, except aluminium, declined in low volumes, as lead lost 0.1 percent to $2,280 a tonne; zinc shed 0.1 percent to $4,216.50 a tonne; nickel slipped 0.6 percent to $33,100 a tonne; tin was down 0.2 percent to $39,915 a tonne; while copper was little changed at $9,859 a tonne.