Aluminium prices have been rising constantly owing to supply side disruption

Aluminium prices are currently on an upward trajectory, largely due to China's improving manufacturing data and supply-side constraints. October data showed expansion in China’s factory activity, fueled by targeted stimulus efforts designed to bolster economic growth. These measures have not only stimulated demand but have also signaled the likelihood of sustained aluminium consumption as the country’s industrial sectors ramp up production.

At the same time, shortages in alumina - a key input for aluminium production have intensified demand, prompting systematic fund buying and pushing prices higher. The situation is further complicated by export suspensions from Guinea, one of the world’s top suppliers of bauxite, the primary source of aluminium. This disruption has raised significant concerns about the long-term availability of raw materials, adding pressure to a market already facing tight supply.

Global production trends provide additional insight, with a modest year-over-year increase in primary aluminium output. In China specifically, production rose as plants responded to profitable conditions and steady demand, reaching 3.65 million metric tons in September. Cumulative output for the first nine months of 2024 grew by 4.6%, showing China’s strong role in meeting both domestic and international demand.

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Looking forward, China’s economic response to recent stimulus measures is expected to drive further aluminium consumption, suggesting the possibility of stable or increasing prices in the near term.