Aluminium prices surged to a 5 year high on Wednesday as reports showed that China's heavyweight maker, Chinalco, would cut production two months ahead of schedule and would soon remove available inventories.
This year, the government stepped up Chinese environmental regulation, limited supply of aluminum under the influence of the mentality, the London Metal Exchange (LME) aluminum prices have risen 28%. LME benchmark aluminum price up 2.5% to $2177 / ton, days has hit a new high since September 2012 $2194.50 / ton.
"Chinese is hard in the winter before the cut, the French Foreign Trade Bank (Natixis) analyst Bernard Dahdah said," remember the China general election is coming up, and expressed concern about environmental issues before the election is always a popular move".
China's largest aluminum producer, the state-run Aluminium Corp, has begun cutting production in Henan, nearly two months earlier than usual. Aluminum inventories in the LME warehouse fell to 1 million 300 thousand tonnes since 2008, and inventories fell 2725 tonnes on Wednesday.
China's aluminum output fell to a new low of 2 million 640 thousand tons in April 2016 since August. China launched this year's campaign to crack down on smog in northern cities, which has ordered many steel and aluminium makers to cut production. China requires aluminum producers in 28 cities to cut output by 30%.