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.

According to data compiled by the International Aluminum Institute, primary aluminum output rose to a daily average of 118,800 tonnes in April from 115,400 tonnes a day in March. Aluminum for delivery in three months on the LME rebounded since November reaching USD 2,803 per tonne on May 3rd 2011, the highest level since August 2008, on expectations rising oil prices will boost production costs.

Mr Edgardo Gelsomino, a London based analyst at researcher Brook Hunt said that “The price makes everybody make money so there is no incentive to cut down on production. 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% since the start of the year. The metal rose 1.7% to USD 2,670 per tonne. Daily aluminum output in April rebounded 9.5% since its 10 month low in November which goes back to January 1999. Output has climbed 7.7% since January.

Mr Gelsomino said that “Prices are helping, but are not the main driver. It’s normal to see growth. You need to supply a growing demand.

According to the National Bureau of Statistics, aluminum output in China, which accounts for about 40% globally climbed to a record last month as rising prices and ample power supplies spurred producers to use more capacity.

According to CRU International Limited, primary aluminum output in China climbed to a record 1.46 million tonnes in April. Most of the aluminum production capacity that was halted last year due to power restrictions has been restarted.

Mr Svein Richard Brandtzaeg CEO of Hydro said that Emirates Aluminum reached its full production capacity in January. The Qatalum aluminum smelter in Qatar, a JV between Norsk Hydro ASA and Qatar Petroleum is expected to reach full production in June.