Robust demand gives aluminum price a boost
by David Fleschen
Starting today, the markets in China will be closed for a week for the New Year holiday. Liquidity on the exchanges outside China (LME, Comex) is therefore likely to be significantly lower in the coming days, but this also makes prices susceptible to major fluctuations. In recent days, metal prices have risen sharply - several metals marked multi-year highs. Yesterday, aluminum was close to the USD 2,100 per ton mark. On a closing price basis, it reached its highest price since October 2018. First and foremost, aluminum - like the other metals - is being pulled up by the continued good market sentiment. Earlier in the week, Rusal, the largest aluminum producer outside China, expressed optimism about global aluminum demand. According to the report, demand continues to recover despite the current lockdowns, and is currently particularly strong from the automotive, packaging and construction sectors. Rusal expects the robust demand to continue throughout the first half of the year. Earlier,
Alcoa, the largest U.S. aluminum producer, had already made extremely optimistic statements about aluminum demand. Alcoa expects demand to grow by 7% on a global level, citing the general economic recovery, stimulus measures and China as reasons. According to Alcoa's view, the global aluminum market could be balanced this year. Most market observers, on the other hand, expect the supply surplus to remain high. Alcoa's optimism about China, by the way, is only partially shared by China's state-run research institute Antaike. According to Antaike, Chinese aluminum demand is expected to increase by 2% and the Chinese market will remain oversupplied. Experts believe that prices above USD 2,000 per ton are not justified from a fundamental perspective.
Source: Commerzbank Research, Photo: Fotolia