At a time when 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.
Aluminum is up this year while other metals have suffered large falls on the London Metal Exchange. Bloomberg News reports 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. Meanwhile, 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 car makers.
“Technological advancements have made alloys of the metal stronger than steel,” Steve Man, an analyst at Bloomberg Intelligence, wrote in a report last week. “New stamping processes have enabled automakers to produce aluminum body parts that meet tight specifications. They can also make them in intricate shapes.”
On Tuesday, February 10, the day’s biggest mover was Chinese aluminum bar, which saw a 5.6% increase to CNY 13,810 ($2,210) per metric ton. After three essentially changeless days, the price of Chinese aluminum billet dropped 1.3% yesterday to CNY 13,030 ($2,085) per metric ton. The cash price of Chinese aluminum weakened by 0.4%, settling at CNY 13,020 ($2,084) per metric ton. Chinese aluminum scrap held its value yesterday at CNY 12,600 ($2,017) per metric ton.
On the LME, the primary aluminum cash price declined 0.9% to $1,855 per metric ton. The 3-month price of aluminum weakened by 0.8% on the LME, settling at $1,869 per metric ton. The Indian aluminum cash price declined 0.6% to INR 116.20 ($1.87) per kilogram.