Monthly Aluminum MMI® Falls, Up and Down Like A Roller Coaster

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The monthly Aluminum MMI® registered a value of 89 in January, a decrease of 5.3% from 94 in December.

Aluminum_Chart_January-2015_FNL

Aluminum fell again in another volatile month. After the bullish first half of 2014, aluminum seems unable to rise in the face of a strong dollar and sinking oil prices. Primary Aluminum on the LME is back bellow $1,900/ton as the bears have regained control.

If you frequently read us, you should have heard us arguing that 40% of the movements that a metal makes are due to the general market, another 30% due to the metal sector and the remaining 30% due to what is going on with that specific metal. This means that an individual metal has little upside potential while commodities and industrial metals are both in bearish mode.

This is exactly what’s happening with aluminum. In terms of supply & demand, no one would disagree that the aluminum market has finally moved into deficit. However, that has little relevance while commodities keep falling as oil sinks, the dollar keeps rising, foreign markets tumble, and  other base metals keep getting hit.

Positive fundamentals in the aluminum industry might help aluminum prices to hold their values better than other base metals, but there is certainly little we can expect from the grey light metal in a bearish environment like the one we are in.

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After falling 10.4%, Chinese aluminum bar finished the month at $2,095 per metric ton. A 9.4% decline for the primary aluminum cash price on the LME left it at $1,831 per metric ton. On the LME, the aluminum 3-month price closed the month at $1,858 per metric ton after dropping 7.0%. The Indian aluminum cash price declined 6.2% over the month to $1.87 per kilogram. The price of Chinese aluminum billet closed the month at $2,127 per metric ton after dropping 5.0%. European 1050 aluminum prices fell 4.4% to $2,985 per metric ton. The cash price of Chinese aluminum fell 3.9% to $2,094 per metric ton. A 3.8% decline for European 5083 plate left the price at EUR 2,843 ($3,437) per metric ton. Chinese aluminum scrap fell a slight 0.8% over the past month to $2,031 per metric ton.

Prices for Korean 3003 coil premium over 1050 sheet remained constant this past month, holding at around $3.39 per kilogram. The price of Korean 5052 coil premium over 1050 sheet held steady around $3.52 per kilogram last month. At a price of $3.34 per kilogram, Korean 1050 aluminum sheet did not budge the entire month.

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.

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