Aluminum Rises to 3-Year High
Aluminum futures in the UK reached $2,815 per tonne in October, marking a three-year high due to tight supply conditions. China's aluminum output cap of 45 million tons is expected to be breached, while Beijing has reduced its annual output growth target for base metals to 1.5%. Supply issues are compounded by the suspension of a potline at Iceland's Grundartangi smelter and Alcoa's closure of its Kwinana alumina refinery in Australia. Consequently, primary aluminum stocks at the LME have decreased by nearly 25% to 484,000 tonnes.
Aluminum futures in the UK rose to $2,815 per tonne in October, the highest in three years, on a backdrop of increasingly tight supply.
Major consumers remained alert to near-term tightness in physical markets due to China's aluminum output cap of 45 million tons, which is set to be breached this year under current capacity.
The move was exacerbated by Beijing cutting its annual output growth target for base metals to an average of 1.5% annually for next year, compared to the 5% target previously, aligned with its anti-involution campaign to slow deflationary pressures.
Troubles for key refineries also pressured supply, with one of two potlines in Iceland's Grundartangi smelter being suspended due to electrical equipment failure.
Also, Alcoa announced it will shut its Kwinana alumina refinery in Australia due to deteriorating bauxite or grades.
Consequently, primary aluminum stocks at the LME this year fell by nearly 25% to 484,000 tonnes.
