Aluminum price hit two-year high as China tightens restrictions on aluminum production capacity


Aluminum has climbed in tandem with other commodities this year. Demand will be boosted by expectations that the USA will loosen monetary policy and China step up its efforts to rescue the troubled real estate industry.

In 2024-25 energy conservation and carbon reduction work plan, China State Council pledged to tighten production capacity limits in industries ranging from steel to alumina, then boost aluminum’s momentum.

“Considering China’s healthy demand, aluminum is a good new target for funds exiting the copper market” said Kou Meiyun, an analyst at Daohe Private Equity Fund Management.


Aluminum futures gains accelerated after top producer China tightened capacity controls on a range of metals to meet emissions reduction targets.

Aluminum has climbed in tandem with other commodities this year on expectations that an easing of monetary policy in the United States and China's stepped-up bailout of its struggling property sector will boost demand.

In its 2024-25 energy conservation and carbon reduction work plan, the State Council pledged to tighten production capacity restrictions in industries ranging from steel to alumina, which further boosted aluminum's upward momentum. The government said late on Wednesday that China will strictly control the new production capacity of copper smelters and alumina output, and adopt reasonable methods to allocate new production capacity of silicon, lithium and magnesium; and reiterated the strict implementation of the "aluminum swap plan", That is to say, any new smelting plant must be premised on the closure of existing smelting plants; and it is said that new production capacity of aluminum, alumina, polysilicon and lithium batteries must reach advanced energy efficiency levels.

At press time, London Metal Exchange (LME) aluminum futures were trading at $2,758, extending this quarter’s gains to more than 18%.


Post time: 2024-06-03 10:23:37