The tops of Diet Dr. Pepper Cherry cans
The tops of Diet Dr. Pepper Cherry cans - 
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Kai Ryssdal: The commodity of the day this Monday is aluminum. Despite sluggish demand and a healthy supply, prices are up 30 percent so far this year. We asked Joel Rose to find out how come?

JOEL ROSE: Pittsburgh-based ALCOA is one of the world's largest producers of aluminum. And CEO Klaus Kleinfeld is fairly pessimistic about the global aluminum market. Here he is on a conference call with investors last month.

KLAUS Kleinfeld: We stick to our growth rate projection of a minus 7 percent decline, which is pretty much what we said before.

Given the recession, demand for aluminum to build airplanes and cars is down. And supplies are up: more than 5 million metric tons in warehouses around the world.

And yet, the price of aluminum has been climbing, from a low of 60 cents a pound a few months ago to about 90 cents today. John Tumazos is an analyst at the firm Very Independent Research.

JOHN Tumazos: The stock market and commodities traders appear to be ignoring the status quo, and looking ahead to the next cyclical recovery.

Tumazos notes that demand is already rising in China, where the construction industry is rebounding. And the aluminum market may not be as glutted as it first appears. Chuck Bradford is an analyst with the Affiliated Research Group.

CHUCK Bradford: There's 4.5 million tons of aluminum in theory in inventory in London. More in Shanghai, and more elsewhere. But a lot of it's not trade-able.

Bradford says much of the metal in those warehouses is tied up by investors who bought the aluminum on the cheap, and then locked in deals to sell later, at a profit. Still, despite this year's jump, aluminum prices are a bargain compared to the highs they hit last year.

I'm Joel Rose for Marketplace.