Aluminium prices hit $3,000 on supply concerns, marking a 13-year high

The metal climbed as much as 2.6% on the London Metal Exchange, the highest intraday level since 2008

The Emirates Aluminum plant in Abu Dhabi. Rich-Joseph Facun / The National
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Aluminium reached $3,000 a tonne in London for the first time in 13 years amid expectations that supply disruptions are here to stay, while demand keeps rising.

The metal kept climbing on Monday after advancing 15 per cent over the last three weeks.

Chinese output is down amid drives to reduce emissions and conserve power, while a coup in bauxite producer Guinea has raised concerns over the supply of the material used in aluminium production.

Smelters in the EU are also facing rising costs with both carbon credit and power inputs at record highs, Goldman Sachs Group said.

“In China and increasingly in the EU, policy risk to aluminium supply is growing,” Goldman analysts including Jeff Currie said in a note released on Monday.

While the bank doesn’t see the recent coup in Guinea as materially impacting bauxite, upside risks remain as regional tensions could generate further logistical bottlenecks, they said.

Snarled supplies will dog the industry through the rest of this year and most of 2022, according to many participants at the Harbour Aluminium Summit in Chicago, with some projecting it could take as long as five years to resolve the issues.

The energy-intensive metal has risen by around two-thirds over the past year.

Aluminium climbed as much as 2.6 per cent to $3,000 a tonne, the highest intraday level since 2008, on the London Metal Exchange. It traded at $2,992.50 as of 7.09am in London.

In China, the metal surged as much as 5.4 per cent to 23,790 yuan, the highest since 2006. Other base metals were mainly lower, with zinc falling 0.9 per cent in London.

Updated: September 13, 2021, 9:48 AM