The metal has typically been one of the quieter contracts on China's mercurial futures markets, but supply reforms in the top producer and consumer have caught the attention of the nation's speculators and sent prices to the highest in almost six years. Trading in August has already surpassed the previous monthly record set in November.

While the frenzy is raising concern aluminium's just the latest Chinese commodity bubble that will eventually be deflated by regulators before it bursts, there's also optimism that investors are tapping into a real shift in the fundamental outlook for the metal. The Shanghai Futures Exchange has already stepped in to calm trading in steel and zinc this month as a surge in volume propelled prices to multi-year highs.

"In steel I think it's more about speculation and momentum trading, but in aluminium I really think there is more of a fundamental story there," Mark Pervan, chief economist at consultancy AME Mineral Economics Pty Ltd., said in a phone interview from Melbourne. "China contributes about 55 percent of global aluminium capacity, and when you have such concentrated supply, any major changes in that market matter big time."

China is shutting down unlicensed aluminium production capacity estimated by Citigroup Inc. to be about 4 million metric tons a year. It has also ordered supply curbs over winter to reduce pollution that will shutter as much as 1 million tons a year, according to the bank. China made 31.9 million tons of aluminium in 2016. China Hongqiao Group Ltd., the world's biggest aluminium producer, has said it will shutter almost 30 percent of its capacity.

It's all part of the central government's campaign to eliminate industrial overcapacity, curb pollution and calm international trade frictions, without blowing up its economy and forcing thousands of workers onto the streets. High-profile commentators, including Ren Zeping, chief economist at Founder Securities Co., have fueled interest in commodities by arguing markets are on the cusp of a new cycle that will re-inflate prices.

"The supply-side reforms have been widely discussed by leading online macro-economists, whose legions of small-investor followers dominate China's commodities futures markets," said John Browning, the managing director at broker BANDS Financial Ltd. in Hong Kong. "The online traders are reacting to large macro Beijing policy, but we'll have to wait to see if the current buying is ultimately underpinned by real Chinese manufacturing and industrial demand."

Total aluminium volume on the Shanghai Futures Exchange reached 15.5 million lots as of Wednesday, surpassing the 15.1 million traded in all of November, when commodities surged amid a wave of reflationary optimism following US President Donald Trump's election. Aggregate open interest, or outstanding positions held by traders, was a record 932,608 lots on Tuesday.

The binge has helped aluminium hold its place as the top-performing base metal this year, up 27 percent in Shanghai and 23 percent higher on the London Metal Exchange. Zinc's not far off, up 24 percent in Shanghai, as the prospect of shrinking supply propels the entire base metal complex higher.

Citigroup this week raised its forecast for average aluminium prices next year by 8 percent, saying that supply cuts and environmental curbs were stricter than anticipated.

The government's reforms "seem to have more teeth" than expected, UBS Group AG analysts including Daniel Morgan said in an August 15 note, raising the bank's short-term price forecasts. But there are other factors that may mitigate against tight supply, including existing inventory levels, idle capacity that could restart, plus other new plants due to come on stream, according to the bank.

"There's a danger that market expectations for the supply side are being overpriced at this point," Yi Zhu, analyst at Bloomberg Intelligence said by phone from Hong Kong. "Certainly we aren't talking about small numbers, that would definitely alleviate aluminium's oversupply. But the market is not waiting to find out if all the cuts actually go ahead. We need to wait until we have data for August or September to find out."