Aluminum reached a six-month high on June 10 as smelters curbed supply

Posted by tjdetai on August 12th, 2015

“The whole value chain is more or less dried out of stocks, so therefore we see a stabilization in the market.” Inventories Swell Any gains may be limited because inventories in warehouses monitored by the LME reached a record 4.28 million tons on June 9. Aluminum, used in cars, cans and airplanes, is this year’s worst performer among the main metals traded on the LME, advancing 6.8 percent. Global airline losses may total billion in 2009 as revenue drops 15 percent, the International Air Transport Association said June 8, almost doubling a three-month-old forecast. U.S. sales of cars and light trucks in February were the slowest since December 1981. Transport accounts for about 31 percent of aluminum demand, according to Calyon, the investment banking arm of Credit Agricole SA. U.S. home foreclosures rose 17.8 percent in May from a year earlier, according to RealtyTrac.

Mortgage applications fell to the lowest since February in the week ended June 5, according to the Mortgage Bankers Association. Construction accounts for 18 percent of demand for the metal, Calyon said in September. “We can’t see the demand from the industry picking up just yet,” said Par Melander, head of commodity sales at Handelsbanken Capital Markets in Stockholm. “We have the feeling that the latest rally is mainly driven by investors.” ‘World Economy Depressed’ Goldman Sachs Group Inc. expects aluminum to fall to ,400 a ton within three months, according to a June 3 report. “With the world economy as depressed as it is, and the large quantity of physical metal that is out there, combined with the overhang of closed production capacity, over the near- term, the outlook of aluminum is not that positive,” said Evy Hambro, who helps manage billion at BlackRock Inc.’s BGF World Mining Fund in London.

Aluminum reached a six-month high on June 10 as smelters curbed supply. China, the world’s largest producer, imported a record 439,900 tons in April, customs data show. Chinese industrial production expanded 8.9 percent last month, adding to signs the nation is recovering from its worst slump in almost a decade. Passenger-vehicle sales surged 47 percent in May, the most since February 2006, as government stimulus spurred consumer spending. ‘Market Tight’ “The Chinese market is tight,” said Michael Jansen, an analyst at JPMorgan Chase & Co. in London who expects prices to reach ,800 as early as next month. “The lack of pace in which Chinese smelters are restarting is delivering an ever-larger annualized deficit.” 

To learn more:grade 5 titanium sheet