18 APRIL 2014www.moneycontrol.com
Aluminium positive for short to medium term: MOSt
Edited by : AL CIRCLE
1 min read
Markets have a positive outlook for aluminum in 2014, and expect consumption to grow by about 6%, the same as in 2013. But capacity cuts may lower the surplus during the year as we have seen industry is shutting down inefficient plants to support prices. While most large aluminum companies are taking similar steps, new capacity coming up may result in a surplus situation still. China will be the deciding factor. It is both a large consumer and producer of the metal, and, at current prices, a significant portion of China’s aluminum capacity is estimated to be unviable. If China’s demand slows, that has negative implications. This interplay then is likely to significantly influence how aluminum prices behave in 2014. To sum it up, our take on aluminium is positive for the short to medium term and any dips towards $1740-1760 on the LME or 104-105 on the MCX will be accumulating zone. We discount a possibility of prices sliding to new 4 year lows on the LME or sub 100 level on the MCX.
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