Aluminium International Today
Plenty of ups and downs in Global aluminium prices
Edited by : AL CIRCLE
2 min read
There have been plenty of ups and downs with the global price of aluminium, according to Lloyd T O'Carroll of Davenport & Company. Over the past month, claims O'Carroll in the Aluminum Association's Aluminum Highlights, the LME cash price has gone from just under $2,000 earlier in September to just shy of $2,200/mt mid-month and now sits at around $2,100/mt.
The price of aluminium is at its highest mark since late March, boosted by stimulus worldwide when China announced in early September that it was spending on a fresh infrastructure program.
There was monetary stimulus from the USA's Federal Bank on September 13 when it unveiled its third round of quantitative easing (QE3) extending its view that short-term interest rates are likely remain close to zero from 2014 to mid-2015.
According to O'Carroll, "With the swift rise in aluminum prices, the contango has narrowed noticeably." He said that the spread between the cash and the three-month price had been running around $35/mt for most of August. But over the past few weeks it has declined to near zero.
"We expect a more normal contango of around $30/mt to re-emerge in the near-term. In our view, the fundamentals, while improving, are not strong enough to push the market into backwardation for an extended period of time," he said.
The price of aluminium is at its highest mark since late March, boosted by stimulus worldwide when China announced in early September that it was spending on a fresh infrastructure program.
There was monetary stimulus from the USA's Federal Bank on September 13 when it unveiled its third round of quantitative easing (QE3) extending its view that short-term interest rates are likely remain close to zero from 2014 to mid-2015.
According to O'Carroll, "With the swift rise in aluminum prices, the contango has narrowed noticeably." He said that the spread between the cash and the three-month price had been running around $35/mt for most of August. But over the past few weeks it has declined to near zero.
"We expect a more normal contango of around $30/mt to re-emerge in the near-term. In our view, the fundamentals, while improving, are not strong enough to push the market into backwardation for an extended period of time," he said.
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