Aluminum supply continues to shrink thanks to smelter shutdowns caused by ongoing energy shortages. Aluminum prices enjoyed a brief rebound following the Fed’s latest rate hike of three-quarters of a point. However, in the short term, aluminum prices remain in a downward trend.
Earlier this week, MetalMiner noted how smelter shutdowns in China and Europe were impacting the aluminum market. Indeed, demand continues to drop in places like China, where construction has yet to hit full force after years of COVID-19 shutdowns. However, the question remains: will prices go bullish or bearish in the long run?
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Aluminum Prices and Market Trends
Aluminum prices recently began to break down, breaching short-term range support levels. When this occurred, it indicated the potential for a long-term reversal. However, aluminum fundamental data continues to impose various risk factors on any bullish price action. Still, the growing likelihood of widespread supply shortages counters this.
What’s more, investors and traders continue to monitor aluminum prices under a microscope, especially with 2023 fast approaching. It’s possible these patterns could indicate a long-term downtrend.
US Business: Aluminum Can Shortage
Aluminum cans increased in popularity in recent years, bringing aluminum prices up. Indeed, many breweries and companies prefer aluminum to glass because it is easier to package and less expensive. This, paired with global manufacturing shutdowns, is contributing to a “perfect storm” of sorts.
While the use of aluminum remains crucial for these industries, the supply is simply not there. In fact, the problem is so bad that lead times for aluminum can supplies have been upwards of 5-6 months. Ongoing post-pandemic supply-chain shortages are also a major crux. However, it’s likely that manufacturing shutdowns will = continue to impact aluminum can supplies and, by extension, aluminum prices.
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