NHYDY Norsk Hydro ASA (QX)

By Christopher Alessi and Amrith Ramkumar 

Aluminum prices continued rising Thursday, bolstered by the planned closure of one the world's largest alumina refineries.

Aluminum for delivery in three months rose 1.9% to $2,248 a metric ton on the London Metal Exchange. Prices have risen to their highest level since June lately, lifted by the news that Norwegian aluminum and energy firm Norsk Hydro ASA plans to fully shut its Alunorte alumina refinery in Brazil. Alumina is the key ingredient in aluminum.

"The ex-China alumina market is already tight, and this development only tightens it further," said Warren Patterson, commodities strategist at ING Bank.

Analysts at Commerzbank said in a note that the "complete shutdown [of the Alunorte refinery] now is fueling fears that the global aluminum market will no longer be adequately supplied, especially as uncertainty surrounding the largest Russian aluminum producer also continues."

U.S. sanctions against Russian aluminum giant United Co. Rusal and founder Oleg Deripaska led to a price spike in April, and analysts are still waiting for the situation to be resolved. Rusal has until November to implement governance changes required by the Treasury Department, opening a path for its removal from the sanctions list.

Elsewhere in base metals, copper for December delivery edged up 0.3% to $2.8430 a pound on the Comex division of the New York Mercantile Exchange. Prices have traded sideways in recent weeks, down almost 15% for the year but still up significantly from their mid-August lows as investors await updates on the U.S.-China tariff fight. Some fear a global economic slowdown that would lower demand for metals.

In London Thursday, zinc rose 0.8% to $2,670 a metric ton. Tin added 0.2% to $19,025, nickel climbed 0.7% to $12,860 and lead was up 1.4% at $2,048.

Among precious metals in New York, gold edged up 0.1% to $1,204.60 a troy ounce, lifted by a slightly weaker dollar that made the metal less expensive for overseas buyers. Gold is still down almost 10% in 2018, as the dollar is near its highest level since May 2017 and analysts expect higher rates to make the metal less attractive to investors.

Silver futures added 0.3% to $14.710, platinum edged down 0.6% to $830.70 and palladium was recently down 0.4% at $1,048.50.

Write to Christopher Alessi at christopher.alessi@wsj.com and Amrith Ramkumar at amrith.ramkumar@wsj.com

(END) Dow Jones Newswires

October 04, 2018 09:05 ET (13:05 GMT)

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