Aluminum Posts Best Week Since 2012 as China Optimism Grows

  • Metals climbed on signs of improving demand in biggest user
  • Goldman sees aluminum falling as rebound spurs more capacity

China Is Poised to Ship Out More Aluminum

Aluminum had for the biggest weekly advance in more than three years on signs of improving demand in China, the top metals user, even as Goldman Sachs Group Inc. predicted lower prices.

Aluminum is up for a fifth day, the longest run since November, and touched a eight-month high. The metal, used in window frames and beer cans, rallied 6.2 percent this week. Last week, the Chinese government reported that the nation’s exports jumped the most in a year, boosting the growth outlook.

“Aluminum has been moving up all week long on upbeat expectations out of China,” said Bob Haberkorn, senior market strategist at RJO Futures in Chicago. “This data has tapered down some fears on a slowing global economy.”

Base metals rose this year as Chinese authorities talked up growth and added stimulus, presiding over a revival in the property market. While last year’s commodity rout prompted producers to cut back output to reduce global gluts, Goldman Sachs said aluminum’s price rebound will spur capacity restarts in China.

Aluminum for delivery in three months advanced 1.1 percent to settle at $1,652.50 a metric ton at 5:50 p.m. on the LME. Prices rose 6.2 percent this week, the most since September 2012. Speculators boosted their net-long position in the metal by 59 percent last week to the highest since January, bourse data show.

Prices will slide to $1,350 in the next 12 months, Goldman Sachs said in a report on Friday. While China’s improving economy has been priced into copper, a U.S. interest-rate increase in June or July hasn’t been, the bank said. Metals tend to be pressured by higher borrowing costs, which strengthen the dollar and make purchases less appealing to buyers using other currencies.

In other metals:

  • Copper gained 0.7 percent to $5,031 a ton ($2.28 a pound), ending the week 4.7 percent higher.
  • Lead, and tin also rose in London, while nickel and zinc fell.
  • In New York, copper for July delivery rose 0.6 percent to $2.2685 a pound on the Comex
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