11 FEBRUARY 2014www.fnarena.com
Chile sees aluminium deficit
Edited by : AL CIRCLE
1 min read
Weak aluminium prices are pointing to a major oversupply in the metal in Chile. But, Citi thinks the market indicators for aluminium are conflicting. The London Metals Exchange 3-month prices imply a market that's in significant oversupply, despite the closure of smelting capacity around the world over the last two years. Physical premiums are at record highs, resulting in full prices being seen in North America, whether they're up almost 20% since July 2009, in Citi's calculations, and even up by 5% since the beginning of this year. This has led to speculation there's a deficit.
Citi thinks this is fanciful. Chinese smelting capacity is being built out and the country is increasing its exports of semi-refined aluminium. There's also significant growth in Middle Eastern production. According to the analysts, there's limited supply of readily available metal and a strong financing demand that's being wrongly seen as a signal of a developing deficit.
Citi thinks this is fanciful. Chinese smelting capacity is being built out and the country is increasing its exports of semi-refined aluminium. There's also significant growth in Middle Eastern production. According to the analysts, there's limited supply of readily available metal and a strong financing demand that's being wrongly seen as a signal of a developing deficit.
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