LONDON: The rally in the global aluminium market can likely spur record outflows from China, where elevated prices are capping consumption.
Aluminium on the London Metal Exchange (LME) is trading at its steepest premium to Shanghai futures since March 2022, after the war in the Middle East choked supplies from a key producing region and created a deficit on the international market.
Chinese exports rose 15% in April to 598,000 tonnes, the highest since November 2024. They could climb further to a record of more than 680,000 tonnes in the coming months, said Zhu Liangmin, an analyst with researcher Beijing Aladdiny Zhongying Business Consulting Co.
Aluminium rods for power grids, exempted from a recent tightening in China’s export rebates, and alloys used in wheels, are seeing particular demand.
Although prices in China have been dragged higher by the LME’s surge, as the largest producer, it’s largely immune from the shortage, particularly given a slowing economy and tepid domestic demand.
China’s industrial companies saw their profits soar at the fastest in more than two years, lifted higher by demand. — Bloomberg
