Aluminum prices on the London Metal Exchange hit a 10-year high Tuesday, extending a year-long vertical surge as demand rebounds and supply shrinks, as smelters in top producer China faced tougher power controls, stoking supply worries for the energy-intensive metal. Benchmark three-month aluminum climbed 1.8% to $2,696 a tonne in official trading after touching its highest since May 2011 at $2,726.50, and rapidly approaching all time highs around $3,000.
In China, the most-traded October aluminum contract on the Shanghai Futures Exchange closed up 1.2% at 21,390 yuan ($3,311.09) a tonne, hovering near its highest since August 2008 of 21,550 yuan a tonne hit in the previous session.
Aluminum prices have been supported by production curbs in Chinese smelting regions often aimed at easing the strain on the power grid. The latest price surge comes as the government in China’s Guangxi region, an aluminum and alumina production hub, on Monday called for tougher controls on energy consumption in a statement issued after a teleconference. The region is China’s third-biggest producer of alumina, a primary product of aluminum, with output of 925,500 tonnes in July, according to the National Bureau of Statistics.
