Aluminum futures in the UK edged up to $3,050 per tonne after briefly dipping below $3,000 on November 10th, their lowest level so far this year. The rebound was driven by temporary supply tightness that countered otherwise ample production in China. Ongoing tensions between the US and Iran continued to restrict aluminum shipments from GCC production hubs, pushing the prompt spread on the LME to a five-month high of $94 per tonne, with inventories still at roughly half their pre-war levels.
Nonetheless, rising output from Chinese smelters investing overseas has kept global aluminum prices well below this year’s highs. China’s annual cap of 45 million tonnes on primary aluminum production has encouraged domestic producers to build smelting capacity across Southeast Asia and Africa, with current projects expected to add more than 15 million tonnes of capacity once completed. Indonesia is at the forefront of this expansion, with new smelters projected to boost the country’s primary aluminum production by as much as 70% this year.
