In a year that saw most industrial metals rally to record highs, aluminum has lagged behind. The reason? Oversupply.
According to a recent report from The Wall Street Journal, citing data from the International Aluminum Institute, global aluminum production grew to a record high of close to 5 million metric tons in October. It’s expected aluminum will continue to fall behind other metals in 2017 in terms of price growth as a result of oversupply.
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“As we expect to see further production increases in the next few months, a record-high quantity of aluminum is likely to be produced on a whole year basis,” states a Commerzbank report, according to the WSJ.
Chinese Aluminum Producer Moves Its Supply
Our own Raul de Frutos recently reported on a significant stockpile of 500,000 metric tons of aluminum that’s been shipped from Mexico to Vietnam. What will its impact on price be?
“Although the volume is pretty big, it’s immediate impact on global aluminum prices will likely be none. This is because the metal has already been produced and it’s just moving from one place to another before its final use. The metal is already there and it’s going to be consumed whether it is in the U.S. or in another country. Therefore, it’s all already factored into the price,” de Frutos wrote.
How will aluminum and base metals fare for the remainder of 2016 and into 2017? You can find a more in-depth copper price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds: