Aluminum prices up 16% this year

International aluminum prices have risen sharply since the start of the year on expectations of growing demand in the U.S. and China.

Three-month futures on the London Metal Exchange changed hands at around $1,938 a ton in after-hours trading on Thursday, Japan time. The price briefly touched $1,957 on Wednesday and has climbed 16% so far this year.

During his address to Congress Tuesday night, U.S. President Donald Trump announced plans for $1 trillion in infrastructure spending, raising anticipation of increased U.S. consumption of aluminum for construction and other uses.

China, the world's largest consumer of nonferrous metals, said Wednesday that the official manufacturing purchasing managers' index improved in February. This prompted buying on expectations of stronger domestic demand.

China is also a leading supplier of aluminum, and because many observers expect it to curtail production as an environmental measure, the outlook since the start of the year has been for a sharp drop in supplies.

Many are discussing the likelihood of increased consumption in both the U.S. and China as demand for aluminum cans grows toward summer. "Prices could top $2,000," said Tatsufumi Okoshi, senior economist at Nomura Securities.