China aluminium smelters meet to address 'irrational' price spike

The China Nonferrous Metals Industry Association (CNIA) held a meeting of the country's top aluminium smelters on Monday to address what it described as an "irrational surge" in aluminium prices, which hit a 13-year high in Shanghai.

Aluminium on the Shanghai Futures Exchange rose as much as 4.2% on Monday to 21,550 yuan ($3,332), the highest since August 2008, as production curbs in key Chinese smelting regions - often aimed at easing the strain on the power grid - spark fears of tight supply.

The 10 companies that participated in the CNIA video meeting included state-run Aluminum Corp of China Ltd, or Chalco, and top private-sector producer China Hongqiao Group, according to a CNIA statement published by its research arm, Antaike.

Participants agreed there was "no obvious gap" between supply and demand in the third-quarter aluminium off-season and that they would strive to cope with rising costs by improving efficiency, said the statement, which added that the meeting was also aimed at preventing price speculation.

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"Companies will continue to ensure supply and stabilise market expectations," it added.

Shanghai aluminium is up more than 36% year-to-date even as China continues with a rare release of strategic metal reserves - one of a number of measures it is taking to try to tame high commodity prices and ease the pressure on manufacturers.

Participants agreed that keeping aluminium prices "within a reasonable range is conducive to the stability and long-term development of the industry," the CNIA said of Monday's meeting.

"We will ... take the lead in maintaining the order of commodity market prices and creating a good industry ecology," it added.