Aluminum: China drives prices higher
Audio 01:45
Aluminum rolls.
(Illustrative image) AFP
By: Marie-Pierre Olphand Follow
5 mins
The tonne of aluminum is soaring and reaching the levels of ten years ago.
The cause is still high demand and insufficient production.
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Almost 40% increase this year for aluminum is a blow to the building and transport sectors.
Yesterday the metal even reached a peak on the London Metal Exchange.
A threshold that some analysts attribute to Sunday's coup d'état in Guinea: the country is one of the largest exporters of bauxite in the world, it is from this ore that alumina is extracted which is then used to produce aluminum. .
But fears of seeing production stop have not yet been proven.
On the contrary, the putschists wanted to reassure by asking the miners to continue their activities.
To see in the coming days if this will be the case ...
When Chinese politics come into play
What has on the other hand brought prices so high gradually in recent weeks is Chinese policy.
To meet its energy goals, the Middle Kingdom has decided to lower its electricity consumption.
And since the processing of aluminum is particularly energy intensive, several aluminum smelters have been ordered to reduce their production from August.
“Since
there are relatively few primary metal producers, they are easy to control,
” says one expert, “
especially in China
”.
In addition to Chinese restrictions, another occasional stressor in the markets has been added, the shutdown of operations in an alumina refinery in Jamaica following a serious fire.
But a deficit market
Opposite, demand is not slowing down, on the contrary.
In the first six months of the year, it is even up 10% compared to last year, according to the World Bureau of Metals Statistics.
All things considered, the aluminum market is in deficit this year.
A deficit which amounts to more than a million tons, whereas last year, the surplus was of the same order.
The placing on the market by China of a stock of aluminum this summer from its national strategic reserves was not enough to contain the prices of the metal.
However, this was the objective displayed by Beijing: to supply the market, in order to slow down the rise in prices, so as not to slow down the recovery of the national economy.
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