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Shanghai aluminium makes biggest gain since April on slender inventories

By Reuters News

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 1.86% to 22,700 yuan ($3,403.15) a metric ton as of 0253 GMT, having gained as much as 2.36% 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 December contract's premium over the December contract, stayed steep at about 300 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.

The LME benchmark three-month aluminium contract edged up 0.13% to $3,072.50 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 seen persistent outflow. Stocks declined more than 30% last week to 132,605 tons, according to SHFE's weekly stock report, their lowest since January. A similar decline was also 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 0.54%, zinc declined 0.17%, lead slipped 0.19%, nickel eased 0.04% and tin lost 0.58%.

On the SHFE, copper slipped 0.04%, zinc rose 0.20%, lead fell 0.72%, nickel gained 0.44% and tin declined 0.27%.


($1 = 6.6703 Chinese yuan renminbi)

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