Aluminum prices reach $3,000 for the first time in 13 years amid supply disruptions

The metal has gained more than 15% in the past three weeks as supply risks increased across the industry, from bauxite mining in Guinea and alumina refining in Jamaica to aluminum smelting in China and beyond.

Chinese producers suffered a fresh blow on Monday as Steelhome reported that Yunnan province would impose production restrictions starting this month in an effort to meet energy intensity reduction targets. Goldman Sachs Group Inc said smelters in the EU are also facing rising costs with both carbon credits and electricity inputs at record highs.

Goldman analysts, including Jeff Curry, said in a note issued on Monday, “In China and increasingly in the EU, policy risks to aluminum supplies are increasing. However, the Bank does not see the recent coup in Guinea as affecting bauxite.” However, the upside risk remains, he said, as regional tensions could lead to further logistical disruptions.

According to several participants at the Harbor Aluminum Summit in Chicago, snarled supplies will affect the industry for the rest of this year and for much of 2022, with some projecting it could take up to five years to resolve the issues. The energy-intensive metal has grown by about two-thirds in the past year.

See also: The aluminum industry fears that its supply has just begun

Aluminum on the London Metal Exchange climbed 2.6% to $3,000 a tonne, the highest intraday level since 2008. It was trading at $2,949 as of 10:31 am in London. In China, the metal rose 5.4% to 23,790 yuan, the highest since 2006. Other base metals were mainly lower, with copper trading down 0.3% in London and 2.6% in nickel.

The country’s largest smelter Aluminum Corporation of China Ltd rose 12% in Hong Kong on Monday. Citigroup Inc analyst Jack Shang said in a note that Chinese materials equities could see further re-ratings as more government steps to curb steel production to cut emissions and prices for cement, steel and aluminum. can promote.

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