FX.co ★ Aluminum Rises Toward 3-Year High

In October, aluminum futures climbed towards $2,730 per tonne, marking their highest level in three years, primarily due to expectations of reduced supply. The Chinese government has adjusted its growth target for annual base metals output to an average of 1.5% for 2025 and 2026, down from the previous target of 5%. This adjustment aligns with China's aluminum production cap, set at 45 million tonnes, a limit expected to be exceeded this year due to existing capacities. This move is part of Beijing's anti-involution strategy aimed at moderating manufacturing capabilities to mitigate deflationary pressures. Additionally, Alcoa has announced the closure of its Kwinana alumina refinery in Australia, prompted by the declining quality of bauxite ore. Strong physical demand for aluminum has led to increased withdrawal requests in global warehouses, although primary aluminum stocks fell by 55,000 tonnes in September to 415,000 tonnes, levels that have since rebounded from their monthly lows.