Aluminum, Headed for Monthly Gain, May Rise on Relative Value

Oct. 30 (Bloomberg) -- Aluminum may rise in London on speculation that the metal offers better value than others as rebounding economic growth feeds demand. Inventories in warehouses monitored by the London Metal Exchange dropped for a seventh day to 4.56 million metric tons, daily figures showed. Stockpiles are down 0.6 percent this month, heading for a second decline after 18 increases. Aluminum has climbed 27 percent this year, the least among the six main industrial metals traded on the LME. “Aluminum has the best value in relative terms,” said David Thurtell, an analyst at Citigroup Inc. in London. Inventories of the lightweight metal have “definitely peaked and are heading down quite significantly.” Aluminum for three-month delivery rose as much as $10, or 0.5 percent, to $1,962 a ton on the LME and was at $1,948 a ton at 10:11 a.m. local time. The contract has added 3.1 percent this month. Prices may climb to $2,400 a ton by the end of the year, researcher Harbor Intelligence said in a report yesterday. Copper fell $46.50, or 0.7 percent, to $6,618 a ton, reducing this month’s advance to 7.5 percent. Metal for December delivery lost 0.5 percent to $3.0155 a pound on the New York Mercantile Exchange’s Comex division. Premiums for aluminum in southern Europe are rising on limited supplies, according to Laredo, Texas-based Harbor. Metal booked and due for delivery from LME-monitored warehouses comes to 123,025 tons, according to the exchange. Alcoa Shares Alcoa Inc., the largest U.S. aluminum producer, jumped 9 percent in New York yesterday after saying it will study aluminum designs with Commercial Aircraft Corp. of China for the planemaker’s new C919 Jet. The LME Index of six industrial metals rose 3.5 percent yesterday, the most in three weeks, as the Commerce Department said the U.S. economy expanded 3.5 percent from July to September, marking the end of the deepest recession in seven decades. Lead jumped 6.1 percent. Among other LME metals for three-month delivery, zinc fell 2.2 percent to $2,220 a ton after Shanghai Futures Exchange- monitored inventories jumped 24 percent to 145,536 tons. Lead dropped 0.7 percent to $2,348 a ton, nickel declined 0.9 percent to $18,530 a ton, and tin slipped 1 percent to $14,900 a ton. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net