Aluminum’s Shine Won’t Last – by David Fickling (Bloomberg News – April 27, 2017)

The most boring industrial metal has been looking a bit more exciting of late. Aluminum’s dispersed supply chain and huge exchange inventories have meant that for the most part, the price doesn’t do much.

While copper, zinc and nickel have whipsawed on strikes, deliberate shutdowns and political turmoil, the lightweight metal has plodded along between $1,500 and $2,000 a metric ton for the best part of five years.

Things seem to be changing. Aluminum is the best performer of the London Metal Exchange’s major metals this year, up 17 percent as those exchange inventories head toward a nine-year low and China plans further smelter shutdowns in Xinjiang, the main growth region for capacity.

Even President Donald Trump is getting in on the fun, with his Commerce Secretary Wilbur Ross announcing late Wednesday an investigation into whether imports of aluminum are harming U.S. national security.

Put that together and you can imagine an argument for the metal going higher yet. The warehouses seem to be running low, even as Beijing plans capacity cuts in an industry that produces more than half the world’s aluminum. Add the threat of a trade war, and it’s easy to see how supply shortages could follow.

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