Eric Onstadjue, April 28, 2022, 2:00 p.m.·2 min read
By Reuters
LONDON, April 28 (Reuters) - Aluminum prices rose on Thursday due to concerns about the supply of the metal, which requires high energy costs to produce, after Russian company Gazprom cut off gas supplies to Poland and Bulgaria.
* However, other base metals fell in reduced volumes, due to uncertainty over how rising inflation and lockdowns in China will affect global growth and the weakening of the Chinese yuan.
* Three-month aluminum on the London Metal Exchange (LME) rose 0.9% to $3,120 per ton at 1015 GMT, extending a 1% gain from the previous session.
* "Growing tension in the energy sector will continue to provide long-term support for aluminum. The fundamentals are solid," said Gianclaudio Torlizzi, a partner at consulting firm T-Commodity in Milan.
* The interruption of gas supplies to two European countries fueled fears that more states would be affected, especially Germany.
* Aluminum, which requires large amounts of energy in the smelting process, has seen a reduction in operations due to rising energy prices.
* However, the extension of lockdowns in China, the main consumer of metals, to combat COVID-19 has fueled concerns about overall demand for metals, as the country's currency, the yuan, fell on Thursday to a nearly 17-month low against the U.S. dollar.
* "The weakening of the yuan is negative for base metals, and the yuan is expected to weaken a little further, which will continue to put pressure on base metals," Torlizzi added.
* The dollar index was at its highest level since January 2017, making metals priced in dollars more expensive for buyers using other currencies.
* The global economy will expand more slowly than predicted three months ago, according to Reuters surveys of more than 500 economists.
* Peruvian police said on Wednesday that they had evicted an indigenous community that had set up camp inside a huge open pit at the Las Bambas copper mine, forcing operations to be halted.
* Among other base metals, copper traded almost flat at $9,859 per ton, lead fell 0.1% to $2,280, zinc fell 0.1% to $4,216.50, nickel fell 0.6% to $33,100, and tin lost 0.2% to $39,915.
