RE: teccc31 Aug 2021 13:21
Aluminium prices have soared to a 10-year high this morning, extending a year-long rebound as demand surges and supply of the usually abundant metal comes under pressure.
Bloomberg has the details:
Prices rallied as much as 2.9pc to $2,726.50 on the London Metal Exchange, hitting the highest since 2011 and moving closer to an all-time high above $3,300 a ton.
Goldman Sachs, Citigroup and Trafigura Group are among those forecasting further gains ahead, as the industry braces for a potentially seismic shift into deepening deficits.
Supply is increasingly challenged, particularly in top producer China. The country’s energy-intensive aluminium industry has come into Beijing’s crosshairs during a crackdown on pollution, while a seasonal power crunch has also dented output. A big boost this week came from Guangxi province, an aluminium hub in the southwest where authorities want to cut metals output to slash energy usage.
“A slew of Chinese policies has recently come to affect aluminium output, pushing prices higher,” Wei Lai, an analyst with TF Futures, said by phone from Shanghai.
“Chinese policies including the power consumption cap are expected to stay through the rest of the year. So the upside momentum remains for aluminium. Prices can hardly retreat as long as demand remains intact.”
The metal, which is used in everything from car parts to drinks cans and home appliances, fared particularly badly at the onset of the pandemic, but is now enjoying a strong resurgence as consumer demand and economic activity bounces back.
In the years to come, demand looks set to soar in electric vehicles and renewable energy, and efforts to rein in the aluminium industry’s heavy carbon footprint could spell the end of a decade-long era of oversupply.
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