The aluminium market is up 0,8 per one cent in the premarket trading session.
This is the biggest rally since early July, and it comes as some of the world’s biggest producers including South Korea’s Samsung and China’s Xiaomi have launched new products based on the aluminium-based technology.
Aluminium stocks have been soaring since mid-July, with the benchmark benchmark metal index up 0-1 per cent so far this year.
This means there is a clear upturn in the metal sector and it’s likely that aluminium will gain a foothold in the global market, said Mark Schmucker, senior metals analyst at CMC Markets in Melbourne.
Aluminum stocks have rallied for the past five months, fuelled by optimism about a global market recovery from a glut of aluminium produced by China, the United States and others.
The aluminum price is set to surge, with aluminium prices hitting record highs in recent months.
The aluminium sector is also looking for a boost in the coming months.
The market will soon be trading in the range of $US10-$US13 per kg.
Albumen is a form of aluminium used to manufacture metal-based items such as cars and aircraft.
Metal makers in the United Kingdom are looking at the prospect of boosting output of aluminium in the UK after the Government introduced a ban on imports of aluminium-related products from 2018.
Alibaba, one of the biggest Chinese internet and retail companies, has also been expanding its aluminium production, adding a major aluminium facility in the country’s south-west to its production operations.
Alcoa has announced it will increase its aluminium output by 80 per cent and its aluminium storage capacity by 20 per cent.
Alcomas, another Chinese company, said it will invest $US1 billion in its aluminium plant in Sydney, while Tata Motors has said it is increasing its production capacity to 50 per cent by 2020.
“We’re seeing the industry’s confidence rising and the price of aluminium continues to rise,” said Mike Kogan, a metals analyst with IG in Sydney.
“I think there’s been a lot of consolidation around aluminium, and I think that’s what we’re seeing happening.”
Aluminium prices have been climbing due to the glut of metal that was being produced by the aluminium industry after the global economic crisis in 2008.
This glut led to an almost $US600 billion supply surplus for the aluminium market in 2016, and the bulk of this surplus came from China.
China’s aluminium industry is expected to be the world most valuable by 2020, with a total of $3.9 trillion worth of aluminium at the end of 2019, according to IHS Markit.
The global aluminium market grew by 6.2 per cent to $US3.75 trillion last year.