LONDON: Aluminium prices scaled a four-month peak on Monday as worries about supplies from top producer China and deficits in Europe and the United States were reinforced by sliding stocks.

Benchmark aluminium on the London Metal Exchange (LME) was up 1.5% at $3,121 a tonne at 1706 GMT, after hitting its highest since Oct. 19 at $3,135 earlier in the session, up 20% since mid-December last year.

Analysts say Chinese authorities aiming to cut pollution during the Winter Olympics are limiting output at energy-heavy aluminium smelters.

“There are few signs of Chinese supply coming back quickly,” said ING analyst Wenyu Yao. “Inventories are low and falling.”

The threat of sanctions against Russia, if it invades Ukraine, could also hit global supplies as Rusal, the world’s largest aluminium producer outside China accounts for around 6% of global supplies.

SUPPLY: China accounts for around 56% of global aluminium production, estimated at around 67 million tonnes last year.

The top consumer is expected to see a deficit around 1.5 million tonnes this year.

DEFICITS: Shortages in Europe and the United States can be seen with the duty-paid physical market premiums that consumers pay above the LME price at record highs, above $460 a tonne and $760 a tonne respectively.

INVENTORIES: Aluminium stocks at 22-year lows of 768,250 in LME approved warehouses are less than half the levels seen in March last year.

Cancelled warrants, or metal earmarked for delivery, at 46% suggest more aluminium, used in the transport, construction and packaging industries, is due to be delivered.

Concern about aluminium supplies in the LME market have created a premium for cash over the three-month contract, last at $35 a tonne.

Aluminium stocks in warehouses monitored by the Shanghai Futures Exchange have dropped 20% since early December last year to 266,906 tonnes.

OTHER METALS: Copper was down 0.7% at $9,768 a tonne, zinc rose 0.4% to $3,626, lead rose 0.6% to $2,202, tin slipped 0.4% to $42,870 and nickel gained 1.7% to $23,380.