Aluminium is in focus as it has seen very huge gains. The metal's prices on the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) have hit their highest levels in 13 years. The price of the metal hit the $3,000 per tonne mark on LME, and 23,770 yuan per tonne on SHFE.

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The price of the metal has risen almost 45 percent so far in 2021. In September alone, aluminium has jumped 5.8 percent.

There has been a bit of a profit taking in intraday trade, however market participants believe that even as the metal is overbought on the charts, the momentum is still on the higher side riding on strong fundamentals.

Firstly, there is lower alumina production, and then Guinea -- is the second-largest bauxite producer -- has seen a shortage of raw materials.

There are smelters in the European Union which also are facing rising costs. Carbon credit and power inputs being at record highs are adding to the prices of aluminium in the European Union, which is importing at a premium.

There are producers and consumers negotiating the annual supply contracts for 2022. The current high prices and supply disruptions are also impacting contractors' specifications.

There has also been a strong surge in demand for aluminium. There are container issues that the markets are still tackling, also adding to the premium in prices. Production curbs in China are a major reason clearly behind the surge in prices. There are also power curbs and labour shortages. China is facing a lot of issues in this regard.

Watch the accompanying video of CNBC-TV18’s Manisha Gupta for more details.

(Edited by : Sandeep Singh)

First Published:Sept 14, 2021 4:42 PM IST