Aluminum futures in the UK have risen above $2,815 per tonne, bouncing back from the nearly one-month low of $2,790 recorded on November 18th. This upward trend is attributed to favorable macroeconomic conditions influencing base metals. The economic environment has shifted towards supporting manufacturing activities, notably after key officials from the Federal Reserve voiced support for further interest rate cuts. Concurrently, Beijing has indicated plans for new stimulus measures to continue addressing its ongoing property crisis. As a result, aluminum futures are on track to achieve an annual gain of over 10%, driven by a recent decline in supply.
China has reiterated its commitment to reducing overcapacity in metal production, aiming to alleviate deflationary pressures. The country, being the leading global aluminum producer, is expected to reduce its output next year due to a capping policy that limits production to 45 million tons annually. Furthermore, Chinese plans to establish smelters in Indonesia are facing delays caused by rising energy costs and regulatory challenges. Additional supply chain pressures have been exacerbated by global disruptions, such as the suspension of one potline at Iceland’s Grundartangi smelter due to equipment failure.
