Drought in China and a fire at a refinery in Jamaica added supply concerns alongside strong demand, accelerating the rise in prices.
The rise in aluminum prices was fueled by concerns over supply, while the drought in China's Yunnan province had reduced the region's hydroelectric production and prompted the local government to ask aluminum smelters to reduce their use.
Eoin Dinsmore, analyst at consulting firm CRU, said that Yunnan will account for 50 percent of global growth in aluminum production between 2020 and 2023, so any deficit there also has a significant impact on the global aluminum market. That's where it happened," he said.
Alongside drought concerns, aluminum prices rose 0.51 percent to $2,629 on the London Metal Exchange, reaching their highest level since April 2018, as a fire at the Jamalco refinery in Jamaica on Tuesday raised supply concerns. Aluminum prices for September delivery, on the Shanghai Futures Exchange, rose 1.4 percent to 20,685 yuan per ton, hitting a 13-year high.
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