Aluminum prices rise despite increasing global primary aluminum output

As we noted yesterday, aluminum prices have continued to rise — this in spite of increasing global aluminum production.
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Global aluminum production rises 3.5%

According to the latest data from the International Aluminum Institute, global aluminum production rose 3.5% in October from the previous month.
October output reached 5.59 million metric tons, up from 5.40 million metric tons in September.
Global aluminum production rose 4.5% year over year from 5.35 million metric tons in October 2019.

China output chugs along

Meanwhile, aluminum production in China totaled an estimated 3.23 million metric tons in October, up from 3.13 million metric tons the previous month.
Furthermore, China’s production reached 2.98 million metric tons in October 2019.
Despite gains in output, the aluminum price has continued to rise. Since the LME three-month price’s April trough, aluminum is up 37%.
As MetalMiner’s Stuart Burns explained last week, China’s metals demand has supported prices this year, even as other economies are not quite as far along in their respective economic recoveries.

“Much of that rise has ridden on the back of a resurgent Chinese economic recovery driving such strong domestic demand that the country has switched to becoming a net importer on key metals this year,” Burns wrote of the economic recovery’s impact on metals prices.
“Ongoing policy stimulus in China has made its way into industrial and construction investment. That should continue to boost investment and industrial output in the coming months.
“Retail sales, while slow to recover in the early summer, are now back to pre-pandemic levels. Auto sales have benefited from pent-up demand earlier in the year supporting the retail sales numbers.”

Here and there

Meanwhile, North American output reached 334,000 metric tons, up from 317,000 metric tons the previous month. North American output in October 2019 totaled 316,000 metric tons.
In relevant U.S. aluminum news, a Senate committee recently allocated funding for a new Aluminum Important Monitoring system.
The system would be aluminum’s equivalent of the extant Steel Import Monitoring and Analysis system.
In addition, GCC production totaled 490,000 metric tons, up from 469,000 metric tons the previous month.
East and Central European output totaled 351,000 metric tons in October, up from 338,000 metric tons the previous month.
Asian production ex-China totaled 350,000 metric tons, up from 341,000 metric tons in September.
Do you use cost breakdowns in your aluminum negotiations? See other tips in negotiating with mills and service centers.