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Aluminum prices hike amid supply tightness & increased investment

30 May 2024 17:02 reported by Ivy Wei

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Aluminum prices have soared to their highest level in nearly two years, driven by supply tightness and heightened buying interest from funds shifting from copper. Senior Marex metals strategist Alastair Munro anticipates a continued influx of "wider money" into metals, which will further support aluminum prices.

While aluminum doesn't face the same mining shortages as copper, alumina supplies have tightened due to reduced output in China and disruptions to Rio Tinto's Australian exports.

Reflecting strong demand, a global aluminum producer has proposed a premium increase of 18-21% for Japanese buyers for the July-September period. Japan, a major aluminum consumer, sets the benchmark for Asia's aluminum prices with the premiums it agrees to pay each quarter. The metal is widely used in transportation, construction, and packaging.