Aluminum is on a rally and taking exchange traded funds (ETFs) that hold the metal onward and upward with them.

The metal hit record highs this week after producers in China agreed to cut output by as much as 10%, reducing concerns over an abundance of inventories, reports Rob Wherry for SmartMoney.

Aluminum Corp. in China has agreed to curb supply by 5% to 10%, which will help alleviate a sixth year of power shortages in China, reports Xiao Yu for Bloomberg. The energy used by aluminum smelters every week is enough to provide power to more than two million people for a year. China’s aluminum producers are the largest in the world.

Alcoa (AA) also reported earnings that surpassed expectations this week, but they’re still below last year’s level. The company is still awaiting an economy whose demand level is expected to grow around 6% this year, reports David Lee Smith of The Motley Fool.

Aluminum benefits from its versatile uses, and is prized for its lightweight properties as well as its ability to resist corrosion. Among its applications is in foil, soda cans, cooking equipment, golf clubs, airplanes, electricity and in buildings.

Among the funds that hold the metal are:

  • PowerShares DB Base Metals (DBB): up 14.9% year-to-date; holds 37.7% in aluminum, so expect a shiny outlook
  • iPath Dow Jones-AIG Aluminum ETN (JJU): launched on July 8

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.