China will allow its floating electricity prices to rise further from October 15
to stabilize supply amid a shortage in the country, according to a notice released by the country’s National Development & Reform Commission, its top economic planner, on Tuesday.
Market sources expect the new regulation to raise production costs for the metallurgical industry - non-ferrous and ferrous alike - as well as downstream end users, because such companies are mostly high energy consumers.
Aluminium continued to trade above $3,000 per tonne during overnight trading, not falling below $3,010 per tonne during the session.
The three-month aluminium price was down by $5 per tonne on Tuesday morning to $3,059 per tonne from $3,064 per tonne the previous day, although bullish sentiment remains strong in both the future and physical markets.
Inventory levels for the lightweight metal fell again, with 12,550 tonnes of the material removed from LME warehouses overnight.
The majority of metal was removed from warehouses in Port Klang, Malaysia and Singapore. Total inventory levels now stand at 1,137,675 tonnes, the lowest level since March 2020.
Meanwhile, zinc's three-month price continued to trade near its most recent year-to-date high of $3,240 per tonne, set on Monday, with a price of $3,223.50 per tonne on Tuesday morning.
LME zinc stocks also had withdrawals, with 2,350 tonnes leaving warehouses across Asia and Europe on Tuesday morning, although some 1,250 tonnes were also re-warranted in Singapore.
Copper's three-month price was the only one to be lower on Tuesday morning, falling to $9,446.50 per tonne from its closing price on Monday of $9,543 per tonne.
- The dollar index was down by 0.09% to 94.32.
- The LME annual dinner takes place tonight after being cancelled last year due to the Covid-19 pandemic.