Aluminum prices hit a nearly 3.5-year high on Tuesday.
The price of three-month aluminum futures on the LME rose 0.6% to $2,893.5 per ton by 6:40 p.m. and reached a high of $2,900.3 per ton during the session, the highest since May 2022.
Prices are rising amid limited supply in the short term and positive demand forecasts in the longer term, Trading Economics notes.
China, one of the leading aluminum producers, has confirmed its intention to prevent overcapacity in the industry, where fierce competition has contributed to lower producer prices.
The country’s aluminum production limit is 45 million tons per year, and it was expected to be exceeded this year.
Supply is also under pressure from problems at key plants, including the suspension of one of two electrolysis series at Iceland’s Grundartangi site due to electrical equipment failure.
Meanwhile, US-based Alcoa has announced that it will shut down its Kwinana plant in Australia due to declining bauxite ore quality.
On the demand side, high consumption in key, rapidly growing electrification sectors and the prospect of a trade agreement between the US and China are providing support.
For a more detailed overview of global aluminum production from 1970 to 2024, see the video on the Experts Club YouTube channel.
