The tight supply pushes aluminium towards 18-month high

According to Reuters reports, the aluminium prices have once again reached close to the 18-month high on Tuesday, which has pushed up the Shanghai futures by more than 2%.

The aluminium rate has edged quite close to the peak it had reached the previous week, the highest it had been since February 2013. The hike could possible be in lieu with the spiking demand and the worldwide shortage of supply.

Ivan Szpakowski, an analyst of Citi in Shanghai expresses his surprise at the rate of increase in the aluminium prices and says that a lot of it is possibly driven by “CTAs (commodity trade advisers), momentum traders, and also macro trading on the more positive views of global economic growth” as opposed to fundamental factors. The prices will settle back to a lower number soon.

The central banks of Europe also have a role to play as they might be forced to shore up their economies as a reaction to the reduced factory growth and this is stirring up further interest in the aluminium.

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