LONDON: Aluminium rose back towards $3,000 a tonne on Friday as the amount of metal available in London Metal Exchange warehouses fell and traders worried that high energy costs would force more smelters to cut output, worsening a supply shortage.
Benchmark aluminium on the LME was up 0.3% at $2,930 a tonne at 1151 GMT, up around 4.5% this week and nearing October's 13-year high of $3,229 a tonne.
Prices rose 42% last year.
Energy prices have rocketed in Europe and Asia and more smelters will likely cut production before spring, pushing aluminium prices higher, said Commerzbank analyst Daniel Briesemann.
"Once we get out of winter, we should see a correction because more supply should be available again," he said.
Base metals fall on hawkish US Fed signals
Stocks: On-warrant stocks of aluminium in LME-registered warehouses have plunged from more than 861,800 tonnes on Dec. 14 to 536,175 tonnes, the lowest since 2005.
Cuts: Energy usually accounts for around 40% of aluminium smelters' operating costs, analysts at Bank of America said.
"With around 650,000 tonnes of capacity cut so far, we believe that another 900,000 tonnes of output is at risk of closing down fully or partially over high energy prices," they said.
Around 68 million tonnes of aluminium -- used in packaging, transport and construction -- are made each year and output cuts in top producer China pushed the market into deficit last year.
Bank of America predicted the deficit would rise to 2.7 million tonnes in 2024, when prices would be around $3,500 a tonne.
Column: Europe's power crunch is sparking an aluminium smelter meltdown, writes Reuters columnist Andy Home.
Markets: Oil prices headed for their biggest weekly gain since mid-December. Global equities were steady after reaching record highs on Tuesday.
Prices: LME copper was up 0.6% at $9,592 a tonne, zinc rose 0.8% to $3,577.50, nickel gained 1.4% to $20,675, lead was up 0.2% at $2,312 and tin was 2.5% higher at $40,100.
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