13 JULY 2011http://www.commodityonline.com/
Aluminum fundamentals make current prices 'attractive'
Edited by : AL CIRCLE
1 min read
Global aluminum fundamentals, such as output costs, inventory trends, scrap and secondary demand and primary aluminum output challenges, are sending signals of “attractive value” at current prices, says Harbor Intelligence.
Analysts see limited downward moves from current levels and “high odds not only of a new wave up in prices but of fresh highs in the next quarters.” Chinese demand is strong, resulting in a tight market despite record domestic production, with Chinese spot prices at a premium of $250 a metric ton to LME aluminum, Harbor says.
Further, Harbor says, backwardation has emerged in the Chinese market, with spot prices higher than futures prices. “Total commercial aluminum-inventory levels in China have halved in the last three months by falling from 889k tons in late March to just 397k tons last week,” Harbor says.
Further, Harbor says, a recovery in automotive-sector demand has pushed up secondary aluminum prices in North America, China and to a lesser extent in Europe, relative to high-grade prices.
Analysts see limited downward moves from current levels and “high odds not only of a new wave up in prices but of fresh highs in the next quarters.” Chinese demand is strong, resulting in a tight market despite record domestic production, with Chinese spot prices at a premium of $250 a metric ton to LME aluminum, Harbor says.
Further, Harbor says, backwardation has emerged in the Chinese market, with spot prices higher than futures prices. “Total commercial aluminum-inventory levels in China have halved in the last three months by falling from 889k tons in late March to just 397k tons last week,” Harbor says.
Further, Harbor says, a recovery in automotive-sector demand has pushed up secondary aluminum prices in North America, China and to a lesser extent in Europe, relative to high-grade prices.
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