Aluminum rebounds as inventories near four-year low

Aluminum rose on speculation that China will further stimulate the economy of the world’s biggest metals consumer and as inventories fell to near a four-year low.

Aluminum gained as much as 0.6 percent after closing at the lowest in eight weeks on Dec. 12. A private manufacturing Purchasing Managers’ Index for China is forecast to slip below the 50 threshold that signals expansion for the first time in seven months, according to a Bloomberg News survey before the data tomorrow. Aluminum inventories tracked by the London Metal Exchange dropped to 4.29 million tons on Dec. 12, the lowest since January 2011, according to bourse data.

China stimulus “is still what investors are expecting,” said Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. “On top of that, we saw an improvement in the aggregate financing, which would have been viewed positively.”

China’s aggregate financing last month expanded to the highest since June, the nation’s central bank said Dec. 12. The country will probably see economic growth slow to 7.1 percent in 2015 from 7.4 percent this year, Ma Jun, chief economist of the People’s Bank of China, wrote in a paper dated the same day.

Aluminum for delivery in three months gained $11 to $1,946 a metric ton on the LME at 3:06 p.m. in Hong Kong. The metal lost 0.6 percent to close at $1,935 a ton on Dec. 12, the lowest since Oct. 16.

Industrial production in the U.S., the world’s second-biggest metals consumer, grew by 0.7 percent in November after shrinking by 0.1 percent the previous month, according to a Bloomberg News survey of economists before data today.

Copper climbed 0.1 percent to $6,497 a ton in London and rose 0.1 percent in New York to $2.9375 a pound. The metal for February delivery in Shanghai rose 0.7 percent to close at 46,710 yuan ($7,551) a ton.

On the LME, zinc, nickel and lead rose while tin was little changed.