Aluminum prices have dropped by over 30% from July until now, according to the LME. News of US smelter shutdowns started less than ten days ago as we have previously reported. And also as we have reported previously, Chinese producers were contemplating production cuts to shore up the price of aluminum.
And according to this article, if the price falls under 15000 Yuan ($2192/ton), Chinese producers will make those production cuts. Based on today’s MetalMiner IndX(SM) China price of 14,600 Yuan, that threshold has been met. With production exceeding demand and inventory at 500,000 tons, the production cuts are likely a good move for aluminum producers.