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Aluminum, used in transportation, construction and packaging, is widely expected to be a sought-after commodity as the transition to greener energy accelerates, though current prices are being suppressed by the sluggish demand growth in top consumer China.

The discount, or contango, for cash aluminum against the three-month contract climbed to $55.50 a metric tonne at Monday’s market close for its highest level since November 2008. That compared to a premium, or backwardation, of $40.50 at the end of May.

The contango has persisted since early June, when China’s Yunnan province started ramping up energy-intensive aluminum production after the end of power curbs.

“I still cannot see any near-term catalyst that could spark a reversal,” one metals trader said, adding that weakening demand and high interest rates were boosting the discount.

Global primary aluminum output rose by 1.8% year on year in the first half of 2023, mainly owing to higher production in China, according to the International Aluminium Institute. In July China’s output rose to near-record levels.

The LME benchmark three-month aluminum contract dropped to its lowest since July 7 at $2,136.5 per metric ton by 1049 GMT.