Aluminum reaches record level

Aluminum prices rose to their highest level in more than three years on Friday as supplies from major producer China escalated after the country's Xinjiang region imposed production restrictions on five smelters. The reference price for aluminum on the London Metal Exchange rose 1.5% to $ 2,658 per ton on Friday afternoon. Previously, prices were at $ 2,664.5, their highest level since April 2018. Aluminum prices on the Shanghai Futures Exchange rose to their highest level since August 2008. "It has everything to do with China and the production restrictions, which are mostly related to reducing emissions, which is unusual in the summer months," an aluminum trader told Reuters. According to calculations by Reuters, the monthly limit values ​​for the five smelters in Xinjiang correspond to a production cut of 10% compared to the first seven months of this year. Xinjiang is a major smelting center in China, accounting for almost a fifth of the supply of the world's largest aluminum producer and consumer. Restricting electricity consumption by smelters in some regions is causing a decline in domestic aluminum supply in China and supporting imports, which increased 47% year over year in the first seven months of 2021. Prices skyrocketed earlier this week after a major fire broke out in a Jamaican alumina refinery and worries about supply disruptions. The metal is up more than 30% this year, ranking second among the six base metals traded on the London Metal Exchange after tin, driven by the global economic recovery. China announced that it would release the third batch of metals from state reserves on September 1 to control prices and prevent commodity inflation from affecting growth. The National Administration for Food and Strategic Reserves said Friday that it will sell 70,000 tons of aluminum, 50,000 tons of zinc and 30,000 tons of copper, quantities in line with the two previous auctions in July. China skipped metal sales in August due to a surge in coronavirus cases, according to a report by the Shanghai Metal Exchange. The Office for Currency Reserves has so far released a total of 270,000 tons of the three metals. This is part of Beijing's promise to rein in markets after this year's commodities rally fueled concerns about inflation in factories.