24 AUGUST 2011china aluminium network
Base metals faring better in China than on LME
Edited by : AL CIRCLE
1 min read
Prices of base metals in China are faring better than those on the London Metal Exchange lately, point out analysts with Barclays Capital. LME base metals suffered “significantly” over the last month on economic and financial-system worries, with aluminum falling nearly 10%.
However, Barclays says, perhaps there has not been sufficient attention to “broadly positive signals” that fundamental conditions in China are robust enough to keep domestic prices from being “dragged into the quagmire of fear and depression” dominating price moves on the LME.
For aluminum,the Shanghai/LME price spread has moved from trading at a discount earlier in 2011 to now a “firm” premium. In fact, for aluminum, the premium is at its highest since October 2009.“While each metal has its own specificities, the signals do point towards a tightening in domestic market dynamics,” Barclays says.
However, Barclays says, perhaps there has not been sufficient attention to “broadly positive signals” that fundamental conditions in China are robust enough to keep domestic prices from being “dragged into the quagmire of fear and depression” dominating price moves on the LME.
For aluminum,the Shanghai/LME price spread has moved from trading at a discount earlier in 2011 to now a “firm” premium. In fact, for aluminum, the premium is at its highest since October 2009.“While each metal has its own specificities, the signals do point towards a tightening in domestic market dynamics,” Barclays says.
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