The price for aluminum for three-month delivery on the London Metal Exchange (LME) has soared to its highest since June 2018, hitting $2,304 per tonne buoyed by registered growth in China’s trade data amid a positive outlook for demand of the sivery-white metal.
At the close of Wednesday’s trading, the price for the metal settled at $2,293 per tonne, raising investors’ optimism towards an expanded aluminium market.
The most-traded May aluminium contract on the Shanghai Futures Exchange also hit 2.7 per cent at 18,045 yuan a tonne, its highest since August 2011, before easing to settle up 1.8 per cent at 17,895 a tonne.
Aluminium for delivery in June also enjoyed a bullish ride, gaining 1 per cent as futures reached $2.339 a tonne on the Comex market in New York.
According to data released by customs, China’s aluminium imports and exports continued their strong rebound in March. Exports recorded a 30.6 per cent rise in March compared to the same period in 2020. Imports were also up 38.1 per cent to $227.34 billion in March 2021 compared to a year earlier which is well above the 24.5 per cent growth initially predicted.
Commenting on the figures, experts suggest that the global economic rebound is helping spur demand in the Asian power house, which also boasts as the biggest base-metals consumer. They further noted that aluminium demand is rising above expectations despite the country’s policies to cut carbon emissions spurs by curtailing the utilisation of the metal.
Alastair Munro, a commodity analyst at Marex Spectron, a UK-based commodities hub, opined that speculations that aluminium output could be restricted in the Xinjiang region of China played a major role in the expansion of open interest in aluminium contracts on the Shanghai Futures Exchange (ShFE).
Daniel Briesemann, Commerzbank analyst noted that despite being affected by the covid-19 pandemic in the first quarter of 2020, the current aluminium consumption data indicates that the world’s most populous country still possesses a considerable appetite for the metal.