Aluminium Futures Correct By 13% In 2011

The non volatile nature of Aluminium futures helped it to nullify some of the heavy selling days in the commodities. Still, Aluminium will take home more than 13% losses on benchmark London forwards contract in the year 2011. Demand outlook for 2012 has been dull and the predictions from some of the China Non Ferrous Metals Industry is that the demand will grow at a much slower pace in 2012 compared to 2011.

World Aluminium markets were in surplus during Jan-October 2011 according to World Bureau of Metal Statistics (WBMS). The release showed that the World Aluminium markets were in surplus of 603800 tons in Jan-Oct 2011. The surplus in Jan-Oct 2010 was 691000 tons.

Aluminium production in Jan-Oct 2011 was up by 5.5% or 1.89 million tons following a 3.92 million tons increase in full year 2010. The total stocks in warehouse are 6.45 million tons by the end of October that compared to 59 days of demand. Stocks at the end of December 2011 were 6.50 million tons.

From levels of $ 2475 per ton in forwards London Metal Exchange markets to a low of $ 2009 per ton in December, Aluminium prices has come down by 19% this year. Aluminium is now nearing $ 2000 per ton in LME, which is also the cost of production of many smelters across the world. The prices are expected to form a base at $ 1980-2000 per ton for the rest of 2011 with upside potential of $ 2100-200 per ton.