Benchmark aluminium on the London Metal Exchange reached as high $US2043, its highest level since November 2014.
The aluminium price has gained around 20 per cent this year.
“Aluminium’s rise is related to capacity cuts and tighter environmental regulations. Shandong province yesterday announced capacity cuts that were larger than expected,” Xiao Fu, head of commodity strategy at Bank of China International in notes.
“It’s related to supply side reform and there is a broad-based spillover into other metals. We are seeing long positions being added in copper and overall market.”
The price has also risen on the back of a weaker US dollar making dollar-denominated commodities cheaper for non-US companies.
The greenback has been under pressure since US President Donald Trump told North Korea that any threat to the United States would be met with “fire and fury” and North Korea responded by saying it was looking at plans for a missile strike on the US Pacific territory of Guam.