27.10.202511:25:59UTC+00Aluminum Rises to Over 3-Year High

Aluminum futures in the UK surged past $2,870 per tonne in October, marking their highest level in over three years. This rise is attributed to a tight supply situation in the short term, coupled with strong long-term demand. China's position as a leading producer was evident as it maintained a focus on preventing overcapacity in its metal production sector. This is a response to heightened competition among the country's smelters, which has exacerbated a producer deflationary spiral. China's aluminum production cap, set at 45 million tons annually, is expected to be exceeded within this year. Supply challenges were further compounded by difficulties at crucial refineries, such as the suspension of one of two potlines at Iceland's Grundartangi smelter due to electrical equipment malfunctions. Additionally, Alcoa announced the closure of its Kwinana alumina refinery in Australia due to declining bauxite ore grades. On the demand side, aluminum continues to see substantial use in rapidly growing sectors related to electrification, maintaining strong consumer buying interest. This positive short-term sentiment is further supported by the improving trade relations between the US and China, moving closer to a potential agreement.