On Monday, August 30, the China Nonferrous Metals Industry Association (CNIA) held a meeting attended by the country’s top aluminium smelters to discuss the continuous surge in aluminium prices, both on the Shanghai Futures Exchange and the London Metal Exchange.
Reaching at a 13-year high, aluminium price on the Shanghai Future Exchange stood at RMB21,550 per tonnes on Monday, the highest since August 2008, driven by production curbs in key Chinese smelting regions due to flood and strict power consumption restrictions. On a year-to-date basis, Shanghai aluminium price is up by more than 37 per cent even after releasing some metal from state reserves, in a bid to ease cost pressure on manufacturers.
On Tuesday, August 31, the LME aluminium benchmark price notched a 10-year peak at US$2,714 per tonne.
The top ten companies that participated in the CNIA meeting on Monday included Aluminium Corporation of China (Chalco) and China Hongqiao Group. According to a CNIA statement, all companies agreed that there was no gap between demand and supply in the third-quarter aluminium off-season and that they would strive to deal with rising costs by improving efficiency.
In a Q&A session with a CNIA publication on Tuesday, an unidentified association official highlighted that there was no tight supply of the metal; rather numerous constraints on production resulted in lower output and price hike as a consequence.
The smelters agreed that keeping aluminium prices “within a reasonable range is conducive to the stability and long-term development of the industry,” read a CNIA statement. It added, “We will ... take the lead in maintaining the order of commodity market prices and creating a good industry ecology.”
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