Aluminium rose for a seventh day -- to near the highest in a decade -- as deepening Chinese output cuts raised fears of a supply shortfall.
The southwestern Chinese province of Guangxi, a major metals producer, will cut output of energy-intensive materials including aluminum, according to people familiar with the matter. That came after the Xinjiang autonomous region imposed similar curbs for August production.
The moves are in response to Beijing’s campaign to save electricity and cut emissions. China produces around 60% of the world’s aluminum and the concerns around output prompted some of the country’s largest smelters to hold a video call on Monday in which they pledged to ensure supply, and to avoid malicious speculation and irrational price surges.
Aluminum prices have rallied almost 40% this year on London Metal Exchange, second only to tin among six base metals. Goldman Sachs Group Inc., Citigroup Inc. and Trafigura Group are among those forecasting further gains ahead as the market moves into a deepening deficit just as the global economic recovery gathers steam.
Aluminum rose 1.9% to $2 698.50 a metric ton on the LME as of 11:27 a.m. in Shanghai. That’s near the peak of $2 718 in April 2018, which was the highest since May 2011. Other base metals were broadly higher with copper up 0.6% as two more mines in Chile, which accounts for more than a quarter of global production, moved closer to strikes.