Aluminum entered a bull market in London and traded near the highest in 16 months on speculation demand will exceed supply for the metal used in everything from cars to packaging, Bloomberg Businessweek reported.
Stockpiles monitored by the London Metal Exchange slumped 9.4 percent this year to the lowest in 22 months. Producers outside China cut output after prices on the LME slumped 13 percent last year. Demand will exceed supply by 136,000 metric tons this year, with the deficit widening to 504,000 tons next year, Bank of America Corp. estimates. Premiums added to the LME benchmark price to obtain metal in Europe, North America and Asia climbed to records this year.
Output cuts outside China, the world’s biggest producer, reached almost 2.8 million tons a year since November 2011, while curbs in the Asian nation amounted to 3.2 million tons since January 2013, according to HSBC.
The cash price of primary Indian aluminum fell 1.1 percent on Monday, July 21 to INR 119.65 ($1.98) per kilogram, making it the day’s biggest mover. Weakening prices followed two days of improvement as the cash price of primary aluminum dropped 0.5 percent on the LME to $1,958 per metric ton. The 3-month price of aluminum closed at $1,979 per metric ton. Following a couple days of improvement, the metal’s price weakened by 0.2 percent on the LME.
Chinese aluminum prices closed flat for the day. The price of Chinese aluminum scrap remained essentially flat at CNY 12,250 ($1,974) per metric ton. The price of Chinese aluminum billet was unchanged at CNY 13,590 ($2,190) per metric ton. For the fifth consecutive day, the price of Chinese aluminum bar held flat at CNY 14,200 ($2,288) per metric ton. The cash price of Chinese aluminum remained essentially flat at CNY 13,450 ($2,167) per metric ton.