FX.co ★ Aluminum Rises to Over 3-Year High

Aluminum futures in the UK surged to $2,915 per tonne in November, marking the highest level in over three years, driven by a tightening supply environment. China reiterated its commitment to mitigating overcapacity in metal production to stave off deflationary pressures. The country's annual aluminum production limit of 45 million tons is poised to be surpassed by next year. Meanwhile, efforts by Chinese smelters to establish new facilities in Indonesia encountered challenges due to rising energy costs and regulatory hurdles. Further contributing to supply constraints, a key smelter in Iceland's Grundartangi facility faced an operational setback, with one of its two potlines suspended following an electrical equipment failure. Alcoa also announced the closure of its Kwinana alumina refinery in Australia, citing declining bauxite ore grades as the cause. On the demand side, aluminum's extensive use in burgeoning sectors such as electrification ensured continued consumer interest. This has bolstered short-term market sentiment, especially as the US and China edge closer to finalizing a trade agreement.