January aluminium price forecast: Australian miners thrilled with turnaround

With the sudden rise in aluminium prices just last week, miners across the world are rejoicing, including in Australia where the outlook is expected to improve.

According to a report from the International Business Times, an increase in US consumer spending has boosted investors’ hopes of a stronger economic projection for the year ahead. The immediate, short-term result has led to stocks of Australian mining conglomerates rising this past week with an extended rally in raw material prices, helping put an end to the recent commodity retreat.

“Mining and metals shares advanced with some expectations of rising investment in underweight commodities stocks in early 2016,” Helen Lau, analyst at Argonaut Securities (Asia) Ltd. in Hong Kong, told Bloomberg. “Signs of improving fundamentals have boosted the market recently.”

Aluminium bulls come out to play We reported last week the London Metal Exchange (LME) aluminium price climbed from the low $1,400s per metric ton in October to the mid $1,550s to begin 2016. An analyst noted: “There is no shortage of metal around and product continues to flood out of China displacing sales that would otherwise be met by global suppliers and generate demand for primary metal. Last but not least, let us not forget that there is some 15 million mt of aluminium sitting in long-term finance deals that, sooner or later, will come back onto the market.”

The market is not really on its way back up for a permanent bullish turn and the overall trend should continue to be a downward one, but also one to keep an eye on, moving forward, he added.