Reuters Africa
ALUMINIUM-Major market developments in October
Edited by : AL CIRCLE
2 min read
Aluminium prices may have made some gains during October, but they have since fallen and will remain under pressure in coming months as demand worries persist.
With as much as half of the industry losing money at current prices producers are likely to respond by curbing output.
"Something has to give and it seems most likely that some form of low price induced production cutbacks will be required to redress the imbalance," RBS said in its latest weekly report.
The London Metal Exchange (LME) three-months aluminium price was last indicated at $2,003 a tonne.
"Aluminium's fundamentals are not great, but the price is deep into the cost curve," BNP Paribas analyst Stephen Briggs said.
Briggs did not rule out the potential for aluminium prices to rise in line with benchmark copper in coming months if concerns about the euro zone crisis and demand prospects subsided.
But any upwards move would be much more muted than copper's, he added.
Meanwhile, Fastmarkets analyst Will Adams saw aluminium prices heading lower, taking the view that even if progress is made in tackling euro zone debt, ensuing austerity measures would hurt metal demand.
"China's looking pretty miserable. They will suffer as Europe suffers so all in all it's not a bright picture."
With as much as half of the industry losing money at current prices producers are likely to respond by curbing output.
"Something has to give and it seems most likely that some form of low price induced production cutbacks will be required to redress the imbalance," RBS said in its latest weekly report.
The London Metal Exchange (LME) three-months aluminium price was last indicated at $2,003 a tonne.
"Aluminium's fundamentals are not great, but the price is deep into the cost curve," BNP Paribas analyst Stephen Briggs said.
Briggs did not rule out the potential for aluminium prices to rise in line with benchmark copper in coming months if concerns about the euro zone crisis and demand prospects subsided.
But any upwards move would be much more muted than copper's, he added.
Meanwhile, Fastmarkets analyst Will Adams saw aluminium prices heading lower, taking the view that even if progress is made in tackling euro zone debt, ensuing austerity measures would hurt metal demand.
"China's looking pretty miserable. They will suffer as Europe suffers so all in all it's not a bright picture."
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