Aluminum Soars High on Supply Concerns

SAO PAULO (Scrap Monster): Concerns over imminent global short supply took aluminum prices to new heights, the highest of this year. Aluminum companies in Brazil have been operating at lowest production levels in 12 years. Rationed power supplies are feared to bring down the production further. According to Bart Melek, an analyst at TD Securities in Toronto, the disrupted supply has lifted aluminum prices to current highs.

Alcoa Inc. has already announced plans to reduce output at two of its smelters. Russia’s United Co. Rusal, the chief aluminum producer said the company’s production would fall to the lowest in at least eight years. The company had reduced its output in 2013 to 3.9 million metric tons as a result of idling large number of inefficient smelter facilities. The net loss of the company had grown to $3.2 billion during 2013.

Aluminum delivery rates in three months rose 1.9 percent to settle at $1,829.50 a metric ton at the London Metal Exchange. Earlier, the price reached $1,830, the highest since Dec. 30. Spot aluminum prices also remained strong during today session.

The squeezed supply of aluminium into global market is expected to keep the prices high for aluminium in 2014, experts say.