Benchmark aluminium on the London Metal Exchange closed up 1.2 percent at $2,099 a tonne after touching its highest since Nov. 29. It has risen more than 20 percent so far this year on expectations of a tighter market.
"China has this year taken out 8 percent of aluminium capacity. It looks highly unlikely this capacity will be allowed to restart in 2018," said CRU Group analyst Eoin Dinsmore.
"We expect Chinese aluminium production growth at 5 percent next year and the year after, down on what we've seen in recent years ... But China will continue to produce more than it consumes next year."
IAI: Data from the International Aluminium Institute showed China produced 16.7 million tonnes in the first half of 2017, a rise of 1 percent from the second half of last year. That compares with a rise of 10 percent in the second half of last year from the first half.
OUTPUT: China last year accounted for 55 percent of global output estimated at nearly 59 million tonnes against 11 percent of 25 million tonnes at the turn of the millennium.
STOCKS: Aluminium stocks in warehouses monitored by the Shanghai Futures Exchange at a record 736,389 tonnes suggest surpluses, analysts say.
ENVIRONMENT: China's war on pollution has involved clamping down on unauthorised aluminium capacity and carrying out inspections to ensure facilities meet the required standards.
BULLS VS BEARS: "Bears maintain the cuts the Chinese have been putting through are going to be more than offset by new production," INTL FCStone analyst Edward Meir said in a note.
"Bulls argue the cuts will not only stick, but will likely expand as well as the government maintains its pollution fight. We think there is a good chance the government could move again, especially if it sees no meaningful decline in overall production levels -- or pollution readings."
BATTERIES: Lead ended down 0.4 percent at $2,552. It touched $2,567 on Monday, its highest since Oct. 16, boosted by expectations of strong demand from auto battery makers over the winter.
WARRANTS: A large position holding between 50 and 80 percent of lead warrants and short term contracts is fuelling worries about shortages on the LME market.
The premium for the cash over the three-month contract rose to $24 a tonne at the close on Monday before falling back to $6.75.
OTHER METALS: Copper finished up 0.5 percent at $6,942 a tonne, zinc closed 0.2 percent higher at $3,201, tin ended flat at $19,355 and nickel fell 0.6 percent to $11,755.