13 JUNE 2014www.moneycontrol.com
Aluminium prices poised to outperform: Ventura
Edited by : AL CIRCLE
2 min read
Aluminum demand continues to rise as in addition to traditional uses, the metal is being increasingly used as a substitute for the more expensive copper in electric cabling and for steel in cars. The demand from these segments will increase by 4.9% in 2014, to 52.7m tonnes. Demand is expected to grow by an even greater amount, about 6%, helping to bring the market closer to balance.
The recoveries in the auto and construction sectors in the developed world, particularly the US, are positive for aluminum. What's more, aluminum's widespread use in consumer goods also suggests it will benefit from China's economic rebalancing towards more consumer-led growth.
With the wide contango, we see no reason why people should consider getting rid of the metal. They will hold on to it and keep things tight.
We may see a price of US$2,100/t - 2150/t by end-2014 or in Q1 of 2015 at LME. Aluminum has been trading at under US$1,900/t in recent weeks.
While on the MCX, aluminum has risen more than 10% in less than a month due to all the factors mentioned above, we advise a buy and hold aluminum on every correction and we may see the metal reaching a price range of around Rs 120-122/kg by the end of 2014.
The recoveries in the auto and construction sectors in the developed world, particularly the US, are positive for aluminum. What's more, aluminum's widespread use in consumer goods also suggests it will benefit from China's economic rebalancing towards more consumer-led growth.
With the wide contango, we see no reason why people should consider getting rid of the metal. They will hold on to it and keep things tight.
We may see a price of US$2,100/t - 2150/t by end-2014 or in Q1 of 2015 at LME. Aluminum has been trading at under US$1,900/t in recent weeks.
While on the MCX, aluminum has risen more than 10% in less than a month due to all the factors mentioned above, we advise a buy and hold aluminum on every correction and we may see the metal reaching a price range of around Rs 120-122/kg by the end of 2014.
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