Monthly Index Belies LME Aluminum Price Forecast, Premiums

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aluminum price index chart

The monthly Aluminum MMI® registered a value of 89 in March, on par with February’s value.

The 3-month LME price closed the month of February at $1,765 per metric ton; a small bounce from the record lows registered at the beginning of the month.

Compare with last month’s trends – here’s our free February MMI® Report.

Most analysts are optimistic with the future role of aluminum in the automotive industry, expecting demand from automakers to gradually increase in the next few years. But at the same time, producers are already investing on upgrading facilities, so it is hard to estimate how exactly this will balance over time just yet.

Aluminum physical premiums continue to play a big role in the total price an industrial buyer pays for its aluminum products, as prices keep weakening and premiums continue climbing. While some groups question the sustainability of aluminum premiums, others insist that high premiums are here to stay.

So where is the price going?

Regarding the LME price, HSBC is calling for prices to average around $2,000 per metric ton through the end of the year. Based on the current picture, we would be very surprised to see this prediction coming true. We remain bearish on aluminum and it wouldn’t surprise us to see prices recording new lows in March.

Aluminum three-month LME price since 2013 chart

LME 3-month aluminum price since 2013. Source: MetalMiner IndX, MetalMiner analysis

Key Price Drivers of Aluminum Index

Following a 3.7 percent upswing on the LME, the cash price of primary aluminum closed the month at $1,724 per metric ton. It was a strong month for European 5083 plate; the metal posted a 3.6 percent increase. Last month, the aluminum 3-month price rose 3.3 percent on the LME to $1,765 per metric ton. The Indian aluminum cash price increased 0.9 percent. The price of European 1050 aluminum increased 0.6 percent.

* Get the complete prices every day on the MetalMiner IndX℠

The cash price of Chinese aluminum fell 4.6 percent.

Korean 3003 coil premium over 1050 sheet held pat last month. Korean 5052 coil premium over 1050 sheet did not budge the entire month. Hovering around Chinese aluminum bar remained unchanged. Chinese aluminum billet traded sideways last month. Korean 1050 aluminum sheet experienced a flat month. Prices for Chinese aluminum scrap remained constant this past month.

Don’t forget to read February 2014 MMI analysis before March’s full report comes out next week!

The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends over a 30-day period. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.