Aluminum surged to the highest in almost three years, leading gains in base metals as Chinese trade data buoyed the outlook for demand.
China’s export momentum remained strong in March after record gains in February, while imports topped expectations, customs data showed Tuesday. The figures suggest the global economic rebound is helping spur demand in Asian nation, the biggest base-metals consumer.
Aluminum demand is rising just as China’s push to cut carbon emissions spurs expectations that aluminum-supply expansions will be curbed. Speculation that aluminum output in the Xinjiang region in China is to be restricted also saw open interest in aluminum contracts on the Shanghai Futures Exchange “expanding,” according to Marex’s Alastair Munro.
Commerzbank AG said China was badly affected by the coronavirus pandemic in the first quarter of 2020, so the reference basis for the trade report is relatively low. “Nonetheless, the data do indicate that China still has a considerable appetite for commodities,” Commerzbank analyst Daniel Briesemann said in a note.
Aluminum for three-month delivery on the London Metal Exchange rose 1.4% to settle at $2,293 a metric ton at 5:51 p.m. local time. It touched $2,304, the highest since June 2018. All other main metals on the LME advanced, with copper up 0.4%.