Chinese aluminum prices moved higher Friday, hitting an 11-year high, exchange data showed, as Beijing embarks on the road to decarbonization, a move that has reduced energy to the power-hungry smelting hub located in Inner Mongolia, even as new capacity came on online, according to Mining.com.
The benchmark price for aluminum on the Shanghai Futures Exchange stood at 18,025 yuan ($2,764) per metric ton, an 11-year high.
In terms of dollars, SHFE aluminum futures printed at 2,800 per metric ton, a critical resistance level dating back more than a decade ago.
Analysts believe the price surge in aluminum is due to Bejing’s curb on aluminum output in the Xinjiang Uyghur autonomous region to reduce carbon dioxide emissions.
According to Mining.com,
Primary aluminum output in the world’s top producer was up 8.5% year-on-year at 3.28 million tonnes in March, the National Bureau of Statistics said, beating the previous monthly high of 3.27 million tonnes reached in December 2020.
High prices are incentivizing production, with Shanghai aluminum mostly holding above 17,000 yuan a tonne in March.
Prices hit an 11-year high of 18,460 yuan on Friday.
In July, aluminum for delivery was down 0.35% on Friday morning after futures touched $2.355 a tonne on the Comex market in New York.