Government investigators and independent auditors are trying to get to grips with yet another wealth management product (WMP) gone awry in China, one that the government itself had promoted.. (A Reuters file picture shows workers direct a crane lifting newly-made steel bars at a factory of Dongbei Special Steel Group Co., Ltd., in Dalian, Liaoning province, China.)
MANILA: Shanghai aluminium futures jumped to their highest level in nearly 10 months on Monday, tracking gains on the London Metal Exchange amid optimism about a demand pick-up up in top consumer China.
While demand is recovering, restarts among aluminium smelters in China after production curbs last year had been slow, tightening supply.
"The whole restarting process has been very slow," said Jackie Wang, analyst at CRU consultancy in Beijing.
This is supporting prices as demand recovers after a series of policies from the Chinese government to boost the real estate sector including lower downpayment and interest rates, said Wang.
The most-traded aluminium for June delivery on the Shanghai Futures Exchange rose as far as 13,075 yuan ($2,010) a tonne, its strongest since July 2, 2015. It closed up 2.5 percent at 12,885 yuan.
On the LME, three-month aluminium was unchanged at $1,652.50 a tonne by 0707 GMT after touching $1,667.50 on Friday, its loftiest since July 29, 2015.
Wang said Chinese aluminium smelters have been very careful in resuming production, fearing that a slew of restarts could weigh heavily on prices again.
"The other thing is restarts take time in China, probably about two to three months and it also costs a lot," she said.
CRU expects 1.47 million tonnes in aluminium smelting capacity may be resumed this year in China, said Wang. That should help increase the country's aluminium output to 32 million tonnes this year from 31 million tonnes in 2015, she said.
LME copper dropped 0.4 percent to $5,013.50 a tonne after hitting a one-month high of $5,091 on Friday. Shanghai copper closed up 0.5 percent at 38,120 yuan a tonne after earlier peaking at 39,010 yuan, its highest since March 7.
China's commodity exchanges are trying to cool their markets as benchmarks rallied rapidly last week, with turnover of a single rebar contract on Thursday worth nearly 50 percent more than the total value traded on the Shanghai stock exchange.
Shanghai rebar slipped 0.3 percent to 2,643 yuan a tonne on Monday. - Reuters
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