27 NOVEMBER 2013www.stockmarketwire.com
Aluminium prices to struggle due to oversupply
Edited by : AL CIRCLE
1 min read
All-in aluminium prices will struggle despite good demand given persistent overproduction, according to a new report by Fitch Ratings.
It says deconsolidation in the industry, producers moving down the cost curve, and substantial barriers to exit have worked to keep production high.
Excess production has been held in inventory driven by financing transactions.
And Fith says that while the London Metal Exchange (LME) rules change may result in LME prices being more closely aligned to the physical market, the change is not expected to alter the physical market fundamentals.
Fitch expects aluminium producers to curtail production further and continue to face challenges but benefit from the current dearth of new investment longer term.
It says deconsolidation in the industry, producers moving down the cost curve, and substantial barriers to exit have worked to keep production high.
Excess production has been held in inventory driven by financing transactions.
And Fith says that while the London Metal Exchange (LME) rules change may result in LME prices being more closely aligned to the physical market, the change is not expected to alter the physical market fundamentals.
Fitch expects aluminium producers to curtail production further and continue to face challenges but benefit from the current dearth of new investment longer term.
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