Are aluminum prices coming down?
By Ruiqifeng New Material ( www.aluminum-artist.com)
London aluminum prices fell to their lowest level in more than 18 months on Monday, as market concerns about weakening demand and a stronger dollar weighed on prices.
Three-month aluminum futures on the London Metal Exchange (LME) fell 0.8% to $2,148.50 per ton, the lowest level since March 2021. The contract fell by nearly half from the record price of $4,073.50 set more than six months ago.
The most actively traded October aluminum futures contract on the Shanghai Futures Exchange fell to $2,557.75 per ton, its lowest level since Sept. 8.
Fears of possible supply disruptions in Russia, a major aluminum producer, pushed up aluminum prices after the Russia-Ukraine conflict erupted earlier this year, while the closure of several European smelters due to soaring power costs added to the rise in prices.
However, as several major central banks raised interest rates, the global growth outlook weakened and the dollar hit a 20-year high, hitting demand for the dollar-denominated LME metal.
“High electricity prices and high interest rates could disrupt industrial production and hurt aluminum consumption. This has led to de-stocking, as evidenced by falling premiums in key regions,” Citi analysts said in a report.
Citi analysts also said, “Looking ahead, end consumption of aluminum will also feel pressure over the next two quarters as Europe shifts into recession …… Any announcement of further smelter closures could lead to a spike in aluminum prices, but we believe any such rally is unsustainable. ”
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Post time: Sep-27-2022
