Feb. 18 (Bloomberg) -- Aluminum had the biggest gain since December on speculation that production cuts by United Co. Rusal and the closure of a smelter by Alcoa Inc. will curb a global glut.
Rusal, the world’s largest producer, will reduce this year’s output by 10 percent to 3.5 million metric tons, the Moscow-based company said today. Alcoa’s Point Henry smelter in Australia will shut permanently in August, reducing the company’s global refining capacity by 190,000 tons, according to a statement yesterday. Prices slumped 13 percent last year.
“In the past, producers were able to operate at a profit,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “The story about shuttering smelters is going along the right track in terms of reducing their production. That would support aluminum prices.”
Aluminum for delivery in three months advanced 1.9 percent to settle at $1,766 a ton at 5:50 p.m. on the London Metal Exchange, the biggest advance since Dec. 27 and the highest price since Jan. 28.
Makers of the lightweight metal will cut at least 700,000 tons of capacity this year, according to Citigroup Inc. Production will still exceed demand by 162,000 tons, compared with 632,000 tons in 2013, the bank said in a report on Feb. 5.
“The market is still in surplus,” David Wilson, an analyst at Citigroup Inc. in London, said by e-mail today.
On the LME, copper for delivery in three months rose 0.3 percent to $7,195 a ton ($3.26 a pound). In New York, futures for delivery in March climbed 0.6 percent to $3.2855 a pound on the Comex, after reaching $3.32, the highest since Jan. 23.
Stockpiles of copper monitored by the LME fell for a 23rd straight session to the lowest in 14 months.
Lead, nickel, zinc and tin also gained in London.
--With assistance from Agnieszka Troszkiewicz in London, Jae Hur in Tokyo and Michelle Yun in Hong Kong. Editors: Millie Munshi, Patrick McKiernan