While other commodities are slumping, aluminum is making a comeback as automakers under pressure to build more fuel-efficient cars increase their use of the lightweight metal.
While copper prices are down 13% this year and iron ore has slipped 11%, aluminum has gained on the year. The rise is small but significant, marking an improvement from a year in which the price of aluminum fell to its lowest level since 2009.
On Friday, January 30, the day’s biggest mover was the aluminum cash price, which saw a 1.5% decline on the LME to $1,822 per metric ton. On the LME, the aluminum 3-month price fell 1.4% to $1,831 per metric ton. The Indian aluminum cash price weakened by 0.6%, settling at INR 112.25 ($1.82) per kilogram.
Producers including Alcoa Inc. and Rio Tinto Group predict demand will continue to rise over the next few years as the metal grows in importance to automakers.
“Aluminum looks very different from other commodities,” Oleg Deripaska, president of the world’s largest producer, United Co. Rusal, told the Automotive News in an interview. “If we look at the developments which we made to develop new alloys, new applications in cars, construction, packaging and manufacturing, I think this is a reward which we must have for the last seven years of suffering.”
Chinese aluminum prices closed flat for the day. The cash price of Chinese aluminum flattened at CNY 12,660 ($2,027) following two-days of declines. Following two days of downward movement, the price of Chinese aluminum bar held steady at CNY 12,670 ($2,029) per metric ton. The price of Chinese aluminum scrap showed little movement last Friday at CNY 12,200 ($1,953) per metric ton. The price of Chinese aluminum billet saw essentially no change for the fifth day in a row, remaining around CNY 13,200 ($2,113) per metric ton.