Aluminum Holds near 4-Month High

Aluminum futures were at $2,640 per tonne, remaining close to the four-month-high of $2,670 touched on July 24th amid the outlook of lower supply and improved demand from top consumer and producer China. Chinese output was due to slow this year as the current production pace is on pace to be bound by the annual cap of 45 million tons, initially mandated to aid carbon emission targets. This coincided with higher demand in Europe as EU members raise investment in defense. Supply for European factories is already limited due to sanctions of major producer Russia. In the meantime, the outlook demand from China also boosted sentiment for industrial metals after the announcement of CNY 1.2 trillion hydroelectric dam signaled that government will infrastructure investment as a way to boost its economy. The move was in line with the government’s pledge to clamp down on overcapacity for industrial metals to counter the impact that its property crisis has on various sectors of the real economy.