Shanghai aluminium notches biggest gain since April on slim inventories

Nov 12 (Reuters) - Aluminium on the Shanghai Futures Exchange bounced on Thursday amid steep near-term premiums as inventories remained limited.

The most-active December aluminium contract on the Shanghai Futures Exchange rose 1.77% to 22,680 yuan ($3,401.37) a metric ton as of 0715 GMT, having gained as much as 2.65% earlier in the session, its biggest intraday rise since April 16.

The contract had fallen in the two previous sessions, marking an 11-month low.

Near-term backwardation, or the front-month November contract's premium over the December contract, closed at 355 yuan a ton. This follows the cash-to-three-month premium on the London Metal Exchange hitting its highest in 30 years at $151.50 on Wednesday.

Backwardation refers to a situation in commodity markets where the cash or near delivery price rises above the price for forward delivery, signalling tight near-term availability.

The LME benchmark three-month aluminium contract edged down 0.28% to $3,060 a ton.

Available aluminium stocks within exchanges remained limited especially on the LME , where inventories have more than halved since the US-Israeli war against Iran. What remained was mostly of Russian origin.

SHFE aluminium inventories have also fallen steadily. Stocks declined more than 30% last week to 132,605 tons, their lowest since January, according to SHFE's weekly stock report. A similar decline was seen in stocks of the Shanghai bourse's on-warrant aluminium , which were down to 47,540 tons as of Wednesday, the lowest since August 2025.

China's downstream buyers stepped up purchases following a recent price drop, while tight nearby supplies and steep backwardation in overseas markets could support a short-term rebound, analysts at Chinese broker Jinrui Futures said in a note.

However, new smelting capacity coming online overseas and expectations of weaker demand could put increasing pressure on prices further ahead, they added.

Among other LME metals, copper fell 1.1%, zinc declined 0.39%, lead slipped 0.35%, nickel gained 0.15% and tin lost 0.23%.

On the SHFE, copper slipped 0.27%, zinc rose 0.14%, lead fell 0.92%, nickel gained 0.78% and tin declined 0.16%.

($1 = 6.6679 Chinese yuan renminbi)