Aluminum Advances for Third Day; China to End Power Subsidies

Oct. 11 -- Aluminum rose for a third day after China, the largest producer of the metal, said it would halt electricity discounts for the industry. Copper and nickel gained. China wants to curb exports and spur imports to save energy and preserve resources such as bauxite, used to make aluminum. The nation's top economic-planning body today said it would stop subsidizing power for producers before the year-end, after the country removed a tax rebate on aluminum rods and tubes in July. The key to further gains in aluminum is ``whether China will become a net importer,'' Tobias Merath, an analyst at Credit Suisse Group, said today by phone from Zurich. Aluminum for delivery in three months climbed $7, or 0.3 percent, to $2,473 a ton on the London Metal Exchange as of 11:26 a.m. today. Earlier it rose 1.2 percent to $2,495 a ton. Prices for aluminum, the most-traded LME metal, will range between $2,600-$3,000 a ton in the next year, Merath said. United Co. Rusal, the largest aluminum producer, said in August that China would probably become a net importer of aluminum in 2009. Aluminum demand will be stronger than any other industrial metal, with world consumption growing 4.9 percent from this year through 2018, according to Barclays Capital analyst Gayle Berry. The surplus for the metal is forecast at 366,000 tons next year, according to Mitsui Bussan Commodities Ltd. Nickel advanced $730, or 2.3 percent, to $32,225 tons. Consumers and financial investors bought the metal at around $31,000 a ton, Merath said. Nickel stockpiles monitored by the LME rose 462 tons, or 1.3 percent, to 36,438 tons, the highest since Feb. 10, 2006. Copper advanced $20, or 0.2 percent, to $8,200 a ton and lead dropped $25, or 0.6 percent, to $3,865 a ton. Tin increased $50 to $16,050 and zinc rose $36 to $3,101.