LONDON: Aluminium prices rose on Thursday after two smelters cut production due to high power prices, fuelling concerns about potential shortages.
Three-month aluminium on the London Metal Exchange climbed 0.5% to $2,824.50 a tonne in official open-outcry trading after two days of losses.
Shanghai aluminium rose as much as 3.6% to 20,585 yuan a tonne, its highest since Oct. 27.
Alcoa halted production at its San Ciprian operation in Spain for two years while Norsk Hydro's majority-owned aluminium plant in Slovakia will cut output to around 60% of capacity.
"While they (Alcoa) may be the first they will probably not be the last European producer of metal that will take this action with energy costs forecast to potentially double during 2022," Malcolm Freeman at Kingdom Futures said in a note.
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A surge in power and natural gas costs across Europe this year has led to output reductions at smelters, chemical plants and other industries.
Chinese centrally owned state firms must cut their energy consumption per 10,000 yuan ($1,570) of output value by 2025 to 15% below their 2020 levels, the state-asset regulator said on Thursday.
LME copper slipped 0.3% to $9,655.50 a tonne but some analysts said the metal may remain supported in 2022.
"Copper demand is expected to enter its second year of expansion, especially after the recently-concluded COP26 demonstrated an increasing willingness by governments to prioritise clean energy," said Howie Lee, economist at OCBC in Singapore.
Peru's government is still far from reaching a deal that would ensure the restart of MMG Ltd's huge Las Bambas copper mine, a community advisor and a government source said on Wednesday.
LME zinc gained 0.3% in official activity to $3,525 a tonne and nickel rose 0.5% to $20,490, but lead slipped 0.2% to $2,283 and tin fell 0.1% to $39,100.
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