Shanghai aluminium prices fell more than 2 percent on Tuesday, slipping below the 14,000 yuan ($2,213) a tonne mark for the first time since late 2016, just two days before winter output restrictions on Chinese smelters are due to be lifted. The most traded May aluminium contract on the Shanghai Futures Exchange (ShFE) was down 2.1 percent at 13,835 yuan at 0344 GMT. It earlier touched 13,820 a tonne, its lowest since Dec. 26, 2016. ShFE copper fell 0.4 percent to 51,840 yuan a tonne.
China ordered smelters in 28 northern cities to cut aluminium output by at least 30 percent from mid-November to mid-March as part of an anti-pollution campaign. Argonaut Securities analyst Helen Lau said the March 15 restart had already been priced in, but new smelting capacity in China was adding even more supply to the market. "I'm sure a lot of these new smelters are keen to increase their production to full capacity as early as possible," Lau said, looking to recover their investment, even at low prices.
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