Is Aluminum Really Still in Surplus?

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Is the world aluminum market in a supply-demand deficit or surplus? It’s a simple enough question but an extraordinarily difficult one to answer.

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Reuters’ Andy Home reports from last week’s LME Seminar: Two respected bank analysts, Citi’s David Wilson and Natixis’ Nic Brown, offered diametrically different views. Deficit, according to Brown, and one that will steadily increase over the next two years. Surplus, according to Wilson, with no sign of deficit until 2017 at the earliest.

The cash price of primary Indian aluminum experienced the biggest price decline of the day, dropping 1.9% to close at INR 121.20 ($1.98) per kilogram on Monday, October 27. Following a couple days of improvement, the cash price of primary aluminum weakened by 1.7% on the LME. Prices closed at $1,950 per metric ton. On the LME, the 3-month price of aluminum declined 1.1% to $1,964 per metric ton.

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Chinese aluminum prices were flat for the day. For the fifth day in a row, the price of Chinese aluminum scrap remained essentially flat at CNY 12,250 ($1,995) per metric ton. The price of Chinese aluminum billet saw essentially no change for the fifth day in a row, remaining around CNY 13,590 ($2,213) per metric ton. The price of Chinese aluminum bar saw little movement at CNY 14,200 ($2,312) per metric ton. The Chinese aluminum cash price remained essentially flat at CNY 13,960 ($2,273) per metric ton.

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