(May 26): Aluminium jumped to a four-year high as fears of output cuts in top producer China compounded continuing disruptions in the Middle East.
The industrial metal rose as much as 1.6% on the London Metal Exchange. Traders are concerned that Chinese smelters will be asked to trim production amid a nationwide inspection of key industries’ energy use and emissions, according to researcher Mysteel Global.
The nation’s aluminium smelters have been running beyond capacity to capitalise on a global shortage caused by the conflict in the Middle East. LME prices have jumped since the start of the war in late February as the effective closure of the Strait of Hormuz dents supply from the region.
Chinese authorities are now moving to rein in that over-production as inventories swell. A smelter in Baise, Guangxi province, has already cut output of molten aluminium, Mysteel wrote, without providing estimates of volumes affected. The steel and oil refining industries will also be targeted, the Ministry of Industry and Information Technology said in a statement on May 13.
Already the biggest producer in the world, China’s daily aluminium output rose to a record 129,000 tonnes last month, according to official data.
See also: Copper holds gain as traders track prospects for US-Iran deal
Aluminium was up 1.3% to US$3,697 a tonne on the LME as of 10.46am in London, the highest since March 2022.
Meanwhile, copper swung between gains and losses, trading near US$13,630 a tonne, as investors monitored progress toward a possible deal to end the war in the Middle East. The red metal rose near-record highs this month following a flurry of bets on the metals needed for the build-out of infrastructure linked to the artificial intelligence boom.
Uploaded by Arion Yeow
