World Aluminum Output Reaches Highest Since 1999 as Prices Climb

Global aluminum production climbed to the highest daily average in April since at least 1999 amid rising prices on the London Metal Exchange.

Primary aluminum output rose to a daily average of 118,800 metric tons in April from 115,400 tons a day in March, according to data, compiled by the International Aluminium Institute. Aluminum for delivery in three months on the LME rebounded since November, reaching $2,803 a ton on May 3, the highest level since August 2008, on expectations rising oil prices will boost production costs.

“The price makes everybody make money so there is no incentive to cut down on production,” said Edgardo Gelsomino, a London-based analyst at researcher Brook Hunt. “Most smelters are making the most of these prices and operating as much as they can.”

Aluminum is this year’s best performer among all metals traded on the LME, gaining 8.1 percent since the start of the year. The metal rose 1.7 percent to $2,670 a ton by 5:04 p.m. today. Daily aluminum output in April rebounded 9.5 percent since its 10-month low in November, according to the IAI data, which goes back to January 1999. Output has climbed 7.7 percent since January.

“Prices are helping, but are not the main driver,” Gelsomino said today by phone. “It’s normal to see growth. You need to supply a growing demand,” he said pointing to a ramp-up in North America and rising production in the Middle East and China.

Chinese Record

Aluminum output in China, which accounts for about 40 percent globally, climbed to a record last month as rising prices and ample power supplies spurred producers to use more capacity. Primary aluminum output in China climbed to a record 1.46 million tons in April, according to the National Bureau of Statistics. Most of the aluminum production capacity that was halted last year due to power restrictions has been restarted, according to CRU International Ltd.

Alcoa Inc., the largest U.S. aluminum producer, will restart idled capacity at three smelters, adding 137,000 tons of output this year, the New York-based company said in January. Alcoa produced 3.59 million tons in 2010.

Emirates Aluminium reached its full production capacity in January. The Qatalum aluminum smelter in Qatar, a joint venture between Norsk Hydro ASA and Qatar Petroleum, is expected to reach full production in June, Hydro’s Chief Executive Officer Svein Richard Brandtzaeg said in April.