FX.co ★ Aluminum Rises to 3-Month High

Aluminum futures have climbed beyond $2,600 per tonne, reaching their highest point since March, driven by a combination of expectations for reduced supply and less pessimist perspectives on manufacturing demand. Production in China, the leading aluminum producer, is anticipated to decelerate this year as the current rate is expected to hit the annual cap of 45 million tons, a threshold originally established to support carbon emission reduction goals. This development coincides with projected increased demand in Europe, as European Union member states indicated plans to boost defense goods manufacturing. The supply for European factories remains tight following sanctions on Russia, a major aluminum producer. Meanwhile, on-warrant stocks at the London Metal Exchange (LME) have risen since the beginning of the year. However, total inventories across both the LME and the Shanghai Futures Exchange (SHFE) are down approximately 60% compared to the same period last year. Nonetheless, the official Manufacturing Purchasing Managers' Index (PMI) from the National Bureau of Statistics of China showed another month of contraction for the sector.