Shfe aluminium closed up 1 percent at 16,490 yuan ($2,485.72) a tonne on Thursday, levels not seen in more than a week, but remained well below their recent near eight-year high of 17,345 yuan a tonne from last month as China imposes restrictions on industrial output over winter. The seasonal curbs on aluminium production itself will not be as severe as expected, analysts at Standard Chartered said in a note, referring to an apparent reprieve for top producer China Hongqiao Group, which looks to have escaped a full 30 percent cut.
"However, new price support has emerged in the form of cost inflation related to the still-rigorous application of upstream winter heating-season capacity cuts for both alumina refineries and other raw material production," they added. In Shanghai, zinc closed up 1 percent, but Shfe nickel finished down 0.5 percent. Shanghai rebar prices closed down 1.7 percent. Norsk Hydro said on Wednesday curtailments of primary production in China have driven positive sentiment and could result in a tighter aluminium market in 2018.
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