FX.co ★ Aluminum Rises to 4-Month High

Aluminum futures increased to $2,650 per tonne in July, marking a four-month high, primarily driven by expectations of reduced supply and a less negative outlook on demand from China. Production in China, the leading producer, is anticipated to decelerate this year due to adherence to an annual limit of 45 million tons, originally set to support carbon emission reduction objectives. Concurrently, there is an anticipation of increased demand from Europe as EU nations have indicated plans to enhance defense goods production. European factory supply remains constrained due to sanctions against Russia, a major producer. Additionally, China's demand prospects have positively influenced sentiment for industrial metals, following the announcement of a CNY 1.3 trillion hydroelectric dam, suggesting that the government plans to leverage infrastructure investment to boost economic growth. This initiative aligns with the government's commitment to addressing industrial metal overcapacity to mitigate the impact of the property market crisis on various sectors of the real economy.