The Aluminum Monthly Metals Index (MMI) rose 4.8% following two consecutive months of decline.

January 2022 Aluminum MMI chart

After a sharp 7.6% drop in the early days of November, prices appeared to have found a bottom and formed a bullish “cup and handle” technical pattern around the summer support levels.

Aluminum prices have broken out of the bullish pattern and now seek new resistance levels on the smaller time frames. The October high will serve as the price target on the longer time frame for this newly confirmed price reversal.

Does your company have an aluminum buying strategy based on current aluminum price trends?

Europe’s energy crisis shutters production

The European energy crisis remains bleak, as the aluminum sector sees further casualties.

Our own Stuart Burns noted last week that Europe’s largest (Aluminum Dunkerque Industries France) and second-largest (Alcoa’s San Ciprián) smelters saw production derailed as energy prices surged.

The cuts continue to roll in.

Most recently, Norsk Hydro’s Slovalko smelter will drop production to 60%. This cut, which equates to roughly 35 thousand mtpa, follows a previous cut which had lowered production down to 80% in 2019.

Soaring energy prices throughout Europe have eroded smelter profitability. Those smelters that rely upon long-term energy supply contracts and renewable energy, including hydroelectric capacity, have remained largely sheltered from the closures and cutbacks.

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The Automotive Monthly Metals Index (MMI) fell by 3.4% for this month’s reading, as auto sales continued to slump in the face of ongoing supply and inventory constraints.

January 2022 Automotive MMI chart

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US auto sales

In the U.S. market, General Motors reported Q4 2021 sales of 440,745 vehicles, or down 43% year over year.

Despite the decline, the automaker indicated the semiconductor supply shortage improved in the fourth quarter.

“GM entered the quarter with record low inventories; however, the company’s fourth-quarter production and wholesale deliveries were up significantly from the third quarter as semiconductor supply conditions improved,” GM said in a release.

However, Toyota outsold GM in the U.S. in 2021, marking the first time GM did not hold the top sales spot since 1931, according to Reuters.

Toyota sold 2,332,262 vehicles in 2021 compared to 2,218,228 vehicles for GM.

Meanwhile, Ford reported its total December sales fell 17.1% to 173,740 vehicles. Truck sales fell 15.5%. SUV sales dropped by 11.1%.

However, while still a relatively small part of the whole, Ford’s electrified vehicle sales jumped by 121.1% to 12,284.

In that vein, Ford announced a commitment to further expand its EV production. The automaker said it plans to nearly double production of the F-150 Lightning pickup to 150,000 vehicles per year at its Rouge Electric Vehicle Center in Dearborn, Michigan.

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