Aluminum price hit 11-year high as new capacity comes on stream

High prices are incentivising production, with Shanghai aluminum mostly holding above 17,000 yuan a tonne in

Prices hit an 11-year high of 18,460 yuan on Friday.

Aluminum for delivery in July was down 0.35% on Friday morning after futures touched $2.355 a tonne on the Comex market in New York.

[Click here for interactive aluminum price chart]

Meanwhile, output of a group of 10 nonferrous metals – including copper, aluminum, lead, zinc and nickel – rose 12.7% year-on-year in March to 5.48 million tonnes, the bureau said.

Daily aluminum output, however, eased in March from the previous two months, Reuters calculations based on
official data showed, dropping to around 105,800 tonnes per day versus 109,300 tonnes per day for JanuaryFebruary, a record.

“March’s record output is due to a 500,000 tonne per year ramp-up of new capacity in the first quarter, offsetting the Inner Mongolia curbs,” CRU analyst Wan Ling told Reuters.

“Some idle capacity has restarted or is going to restart, April production should be still a bit higher compared with
March,” Wan said.

“Data do indicate that China still has a considerable appetite for commodities,” Commerzbank analyst Daniel Briesemann said in a note.

Consultancy AZ China estimates 279,000 tonnes of annual aluminum capacity across seven smelters were shut due to the energy curbs, exceeding its estimate of 130,000 tonnes of new capacity launched in China last month, all in Yunnan.

(With files from Bloomberg and Reuters)

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