By Eric Onstad
LONDON, Feb 20 (Reuters) – Aluminum prices rose on Monday due to supply problems after reports that smelters in China, the world’s largest producer, were cutting output.
Three-month aluminum on the London Metal Exchange (LME) rose 1.3% to $2,419 a tonne at 11:10 GMT, after falling 0.3% on Friday.
* Aluminum production in one of China’s main producing provinces, Yunnan, is expected to decline after further cuts were ordered, analysts said.
* “The market appears to be finding some support in the rebound in aluminum prices, with further production cuts in Yunnan province,” said Ole Hansen of Saxo Bank in Copenhagen. “There are still a lot of supply issues supporting metal prices.”
* Another 415,000 tons of aluminum smelting capacity in Yunnan was ordered over the weekend, Citi said in a note.
* Last year, China’s aluminum output rose 4.5% from a year earlier to a record high, boosted by new capacity and the easing of electricity supply restrictions.
* The weak dollar has also helped metal prices, as commodities denominated in US dollars are cheaper for buyers using other currencies.
* In other base metals, LME copper rose 0.6% to $9,037.50 a tonne; zinc rose 0.7% to $3,079; Lead rose 2.1% to $2,107.50; Nickel rose 1.4% to $26,155; and tin rose 2% to $26,685.
* To view base metal futures prices:
– COPPER
– LEAD
– TIN
– NICKEL
– ALUMINUM
– ZINC (additional reporting by Mai Nguyen in Hanoi; Spanish edition by Carlos Serrano)