Aluminum Rises to a 16-Year High

Aluminum prices rose to their highest in 16 years after 23 smelting companies in China, the biggest producer of the metal, agreed to cut production by 10 percent.
   The smelters, which produce more than 60 percent of China's aluminum, will reduce output to lower demand for the raw material alumina and force suppliers to lower prices, the China Nonferrous Metals Industry Association said. Rising raw- material costs have caused losses at 80 percent of the smelters.
    Prices of aluminum, a metal used in aircraft and beverage cans, have risen 20 percent in the past year. Alcoa Inc., the world's biggest producer, says stockpiles will dwindle through 2007 as demand outpaces supply. Alcan Inc., the No. 2 producer, expects a 200,000-metric-ton shortfall in supplies of the metal this year.
    ``China is a big exporter of aluminum, and any cuts there are going to concern people,'' Robin Bhar, a base metals analyst with UBS AG in London, said in an interview today. ``The market is still in a deficit.''

      Aluminum for three-month delivery on the London Metal Exchange rose as much as $64, or 3 percent, to $2,203 a ton, the highest since May 1989. It traded for $2,202 at 5:30 p.m. local time. The metal is made from alumina, a white powder refined from bauxite.

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