Aluminium prices have peaked, climbing to its highest level in more than 13 years, driven by concerns over supply in China, the world’s biggest consumer and producer of the metal.
The most-traded October aluminium contract on the Shanghai Futures Exchange (ShFE) rose as much as 5.1% to 23,770 yuan ($3,683.27) a tonne, the highest level since March 2008. Three-month aluminium on the London Metal Exchange (LME) hit its highest since July 2008 at $3,000 a tonne.
China has the largest source of bauxite, the alumina ore that produces aluminium. Output curbs in China and political turmoil in Guinea have hiked aluminium prices by about 50 per cent this year.
“Power shortages and environmental measures are restricting output in China. Political unrest in Guinea is also threatening to delay the huge pipeline of new bauxite projects that feed aluminium smelters in China,” ANZ analysts quoted by Reuters said in a note, estimating that more than 1 million tonnes of aluminium output have been disrupted in China this year.
Reports claim that the amount of annual aluminium capacity shut in China this year has exceeded 2 million tonnes and could rise further. ShFE aluminium inventories fell to 228,529 tonnes, their lowest since December 2020, while stocks of the metal in the LME warehouses have dropped 33% since March to 1.32 million tonnes.