LONDON, Jan 7 (Reuters) - Aluminium prices on Friday reached their highest since Oct. 21 as the amount of metal available in London Metal Exchange warehouses fell and traders worried that high energy costs would force more smelters to cut output, worsening a supply shortage. Benchmark aluminium on the LME rose as high as $2,980 a tonne before slipping back to $2,914 a tonne by 1725 GMT, down 0.3% for the day. Prices were still up around 3.5% this week after rising 42% in 2021. Energy prices have rocketed in Europe and Asia and more smelters will likely cut production before spring, pushing aluminium prices higher, said Commerzbank analyst Daniel Briesemann. , read more "Once we get out of winter, we should see a correction because more supply should be available again," he said. STOCKS: On-warrant stocks of aluminium in LME-registered warehouses have plunged from more than 861,800 tonnes on Dec. 14 to 536,175 tonnes, the lowest since 2005. CUTS: A large aluminium smelter in Dunkirk in northern France will reduce production by a further 5% next week, a spokesperson for its owner said. read more Energy usually accounts for around 40% of aluminium smelters" operating costs, analysts at Bank of America said. "With around 650,000 tonnes of capacity cut so far, we believe that another 900,000 tonnes of output is at risk of closing down fully or partially over high energy prices," they said. Around 68 million tonnes of aluminium - used in packaging, transport and construction - are made each year. Output cuts in top producer China pushed the market into deficit in 2021. Bank of America predicted the deficit would rise to 2.7 million tonnes in 2024, when prices would be around $3,500 a tonne. COLUMN: Europe"s power crunch is sparking an aluminium smelter meltdown, writes Reuters columnist Andy Home. read more MARKETS: Global equities, which reached record highs this week, edged lower and the dollar fell after weaker-than-expected U.S. payrolls data. read more PRICES: LME copper was up 1.1% at $9,638 a tonne, zinc fell 0.6% to $3,530, nickel gained 1.7% to $20,725, lead was down 1% at $2,283 and tin was 2.2% higher at $40,000.