Aluminum cemented its spot as the best commodity this year as prices jumped to over $2,000 a metric ton for the first time since 2014.
Prices have rallied as China ramps up efforts to curtail illegal or polluting capacity. The metal added 2.2 percent to $2,008 as of 3:58 p.m. in London, bringing gains for the year to about 19 percent, the biggest rally among 22 raw materials on the Bloomberg Commodity Index.
“It does feel like China’s supply-side reform is deepening, and aluminum is definitely one of our favorite metals,” Xiao Fu, head of global commodities strategy at BOCI Global Commodities U.K., said by phone.
“It’s not just about supply,” she added. “There’s a significant shift in demand taking place as well as China diversifies and upgrades its industry. That’s creating demand for aluminum in lightweight vehicles, and the aerospace industry is looking very healthy in the longer term as well.”
China’s Shandong province, the top aluminum producing hub, called for the closure of 3.21 million tons a year of illegal aluminum capacity by end of July, according to a statement on Shandong NDRC website dated July 24.
For the rest of this article: https://www.bloomberg.com/news/articles/2017-08-08/aluminum-leaps-to-2-000-a-ton-as-china-deepens-capacity-cuts