Aluminium traded near the highest level in more than three years as supply disruptions tightened the market.
The metal has surged 32% this year, second only to tin among the six base metals traded on the London Metal Exchange, propelled by a global economic recovery that’s expected to fuel purchases of goods ranging from automobiles to toasters. The metal is also rising on bets that China, the biggest producer, will curb supply to cut emissions, while power rationing in the Asian nation is expected to further squeeze output.
In the latest development, a major fire at a Jamaican alumina refinery is expected to push the premium buyers pay for aluminum shipped to the US Midwest to new highs, as a potential shortage of aluminum’s feedstock could further tighten the market.
Aluminium rose as much as 0.5% to $2 629 a ton on the London Metal Exchange, near the $2 642 it hit on July 30, the highest level since April 2018. In Shanghai, the metal rose as much as 1.4% to 20,705 yuan a ton, the highest since 2008.
Other metals were mixed, with copper and zinc edging lower. Metals are recovering from last week’s slump as concerns ease over the economic fallout from the delta variant and the prospects for additional stimulus in China buoy the demand outlook.