Aluminum Gains in Asia After Crude Oil Rise Spurs Cost Concerns

Aluminum rebounded from a one-month low in Asia as rising crude oil prices renewed concerns of higher production costs for the energy-intensive metal.

Energy accounts for around 40 percent of aluminum's production costs. Crude oil rose from a six-week low in New York as a tropical storm headed toward the Gulf of Mexico, home to more than a quarter of U.S. oil production

Aluminum ``is moving in line with crude oil,'' Zeng Chao, an analyst at Everbright Futures Co., said in an e-mailed report today.

Aluminum for delivery in three months on the London Metal Exchange traded 0.4 percent higher at $3,045 at 4:08 p.m. in Hong Kong. The metal dropped to $3,020 on July 18, the lowest in a month, after crude oil fell and inventories increased.

October-delivery aluminum on the Shanghai Futures Exchange declined 0.7 percent to close at 19,125 yuan ($2,800) a ton.

Aluminum stockpiles monitored by the London exchange jumped to the highest since May 2004 on July 18. China, the world's largest producer, made 1.15 million tons of the metal in June.

Crude oil for August delivery rose as much as $2.08, or 1.6 percent, to $130.96 a barrel on the New York Mercantile Exchange. It was at $130.59 at 4:16 p.m. in Hong Kong.

Aluminum Corp. of China Ltd., the nation's biggest producer of the metal, said it may lose 30,000 metric tons of output as it halted some capacity at two ventures in the province of Shanxi because of a power shortage.

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