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LME aluminium up as market adapts to China's plan to end tax rebate

Aluminium rates increased on the London Metal Exchange (LME) on Tuesday, while rates on the Shanghai Futures Exchange (SHFE) fell as the marketplace digested China's strategy to remove a tax refund on exports of some aluminium items.

Three-month aluminium on the LME was up 1.0% at $ 2,632 a metric load by 1602 GMT. The most-traded SHFE December aluminium contract shut down 0.4% at 20,470 yuan ($ 2,827.5) a heap.

China's Friday statement that it would cancel a 13%. export tax refund for aluminium semi-manufactured items from. Dec. 1 pumped up issues that global products would tighten up. and leave more of the item inside the country.

In the near term, the cancellation of refunds will make. Chinese aluminium (items) more costly on the global. market and could cause a decrease in export volumes, said. Ewa Manthey, a commodities expert at ING.

LME aluminium, however, will have a hard time to hold on to the. rate rally, which saw it hitting $2,730 on Friday, up until some. physical demand picks up, stated a trader.

Base metals came under pressure on Tuesday afternoon as some. investors rushed to safe-haven assets due to signs of intensifying. stress between Russia and the United States over Ukraine.

The majority of the metals, nevertheless, recovered as geopolitical fears. relieved after the White Home stated the U.S. was not surprised by. Russia reducing its threshold for a nuclear strike and does not. strategy to change its own nuclear posture in response.

Both LME copper and zinc were stable at. $ 9,072 and $2,952 per load, respectively, while nickel. rose 1.5% to $15,970 and tin relieved 0.4% to $28,885.

Lead rose 0.6% to $2,002.50 shaking off the second. day of an inflow of the metal to the LME-registered warehouses. which drove lead inventories to their highest in 11-1/2 years.

(source: Reuters)