The Aluminum Monthly Metals Index (MMI) held relatively flat this month, with a one-point increase to 83, as the majority of prices in the index showed mild increases.

LME aluminum prices generally moved sideways during November and were unable to generate strong upward price momentum due to slower recent economic growth rates and uncertainty over demand in early 2020.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

While prices have not gained as much value recently — even compared to early November highs — prices have not dropped as low either.

During the past month, prices dropped back below the $1,800/mt level after trading above that level during the first week or so of November, but still found support firmly above the $1,700/mt level.

Overall macroeconomic conditions continued to restrain price increases.

SHFE aluminum prices continue sideways

SHFE aluminum prices continued to move firmly sideways during the past month.

Source: MetalMiner analysis of Fastmarkets

Since March, prices traded in a firm band between CNY 13,500/mt and CNY 14,500/mt.

The sideways trend looks set to continue. However, prices recently hit some progressive lows, (although the drops look mild):

Source: MetalMiner analysis of Fastmarkets

Aluminum production in China will most likely continue to grow much faster than demand, according to a webinar by analysts at Shanghai Metals Market (SMM).

In 2020, China’s output of primary aluminum looks set to increase by 2.5% to 36.44 million metric tons (after contracting by 1.51% this year).

This year, capacity totaled around 40.69 million tons, with actual production of around 35.1 million tons on an annualized basis.

Aluminum consumption in China will increase by 0.3% next year to 36.19 million metric tons, after declining by 1.48% this year.

Increased use of aluminum in autos will not be enough to absorb China’s rising production

According to a report prepared for the International Aluminum Institute on long-term automotive use in China earlier this year, aluminum demand for use specifically within the sector in China will increase from an estimated 3.8 million tons in 2018 to 10.7 million tons by 2030, based on a compound annual growth rate of 8.9%.

Let’s put that in perspective.

This past October, Chinese production totaled just around 3.0 million tons.

High production levels likely to constrain price increases into early 2020

Surplus production could continue to weigh on prices next year, resulting in a price drop below $1,700/mt, particularly early in the year.

Once prices drop further, the rate of smelter closures will likely increase, thus relieving downward price pressure.

However, at this time prices continue to trade near break-even levels, likely delaying announcements of production closures into Q1 2020.

What this means for industrial buyers

Aluminum price momentum remained stalled overall this month, with most index prices holding sideways or making only mild gains.

A return of price momentum cannot be ruled out for Q1 2020, especially if both the automotive and manufacturing sectors see a strong global recovery.

Buying organizations interested in tracking industrial metals prices with ease, including embedded forecasting, will want to request a demo of the MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term aluminum price trends may want to read MetalMiner’s Annual Metal Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual metal prices and trends

This month, China aluminum scrap prices increased once again, rising by 2.4% to $1,849/mt. Chinese aluminum primary cash prices also increased again, by 1% to $1,994/mt. Chinese aluminum billet and bar prices saw increases of around 0.4%, to $2,049/mt and $2,144/mt, respectively.

Korean prices dropped back this month by around 3%. Korean commercial 1050 sheet came in at $2.95/kilogram. The 5052 coil premium over 1050 was $3.12/kilogram and the 3003 coil premium over 1050 was $2.92/kilogram.

The LME primary three-month price increased by 0.8% to $1,761/mt.

European commercial 1050 sheet and 5083 plate both increased mildly again this month, by 0.3% and 0.9%, respectively, to $2,482/mt and $2,862/mt.

India’s primary cash price increased by 0.5% to $1.87 per kilogram. 

Global aluminum production in October totaled 5.39 million tons, according to a recent report by the International Aluminum Institute.

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Global production through the first 10 months of the year reached 53.04 million tons, down 0.9% from the 53.51 million tons produced during the first 10 months of 2018.

Of that total, China produced 3.01 million tons, which marked a decline from the 3.13 million tons produced in October 2018. However, China’s October production jumped compared with September’s 2.92 million tons.

Elsewhere, production in the Gulf Cooperation Council (GCC) countries totaled 494,000 tons in October, up from the 478,000 tons in September and the 450,000 tons produced in October 2018.

North American production totaled 316,000 tons, up 1.9% from the 310,000 produced in September but down from 323,000 tons in October 2018.

Western European production totaled 286,000 tons in October, up from 276,000 tons the previous month and down from 321,000 tons in October 2018.

Production in east and central Europe totaled 356,000 tons in October, up form 344,000 tons in September and 343,000 tons in October 2018.

MetalMiner’s Stuart Burns weighed in on aluminum demand and prices last month.

“China’s gross domestic product growth slowed again to 6.0% year over year in the third quarter, its weakest pace in almost three decades, Aluminium Insider reports,” Burns wrote. “Citing a Reuters poll, the report notes industrial activity is expected to have shrunk for the sixth month in October, quoting a Reuters poll, suggesting hardly any relief from slowing global demand and the trade war.

“The latest economic data from the E.U. and the U.S. also indicate slowing growth, with Germany flirting with a recession in the manufacturing sector. Although the aluminum market was estimated to be in deficit last year and this, a Reuters poll suggests it is likely to flip into a surplus of 304,000 metric tons next year — almost a 1 million ton turnaround from the 658,500-ton estimate for this year.”

Despite slowing growth and lagging demand around the world, aluminum prices had previously shown signs of upward momentum, surging past the $1,800/mt threshold in the first half of November.

However, since hitting $1,820/mt as of Nov. 8, the LME three-month aluminum price has lost some steam. The LME three-month aluminum price dropped to $1,738/mt in the run-up to Thanksgiving, according to MetalMiner IndX data.

Alumina production

Meanwhile, the International Aluminum Institute also released alumina production figures Nov. 26.

China’s estimated production of alumina — a key aluminum making material — totaled 6.08 million tons in October, up from 5.88 million tons in September but down from the 6.16 million tons produced in October 2018.

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Global alumina production totaled 110.3 million tons through the first 10 months of 2019, up 1.9% from 108.2 million tons produced during the equivalent period in 2018.

U.S. President Donald Trump has tweeted that he will immediately restore tariffs on U.S. steel and aluminum imports from Brazil and Argentina, according to Reuters.

On Monday, Trump also urged the Federal Reserve to prevent countries from taking advantage of a strong dollar by devaluing their currencies, reports Reuters.

Both countries’ imports would get hit with 10% tariffs on aluminum and 25% tariffs on steel.

MetalMiner Expert Flash Analysis: Here’s the story behind the story

In terms of the currency angle, political turmoil has indeed devalued both Brazil’s real and Argentina’s peso in relation to the U.S. dollar, and whereas the degree of the impact is debatable, this storyline holds together, according to Don Hauser, VP of Strategic Advisory for MetalMiner.

“This tariff re-implementation does two political things — which are the real drivers of the story,” said Hauser. “First, it gives the impression of helping the [U.S.] farmers. While we battle China over trade — which is impacting the farmers — President Trump is doing everything he can to help them in every other place in the world. The second thing is helping the steel industry. In theory, and in public light, this will limit foreign steel entering the market, help drive prices up to a ‘sustainable margin,’ and comes at a time when mills are wrapping up their big annual contracts.

“States with both steel industry presence and farmers are a crucial part of Trump’s voter base,” Hauser continued. “It’s time to start pulling levers to solidify his voters as he heads into an election year. Trade has been the political weapon of choice for this administration and will likely continue.”

For details on which steelmakers would likely be most affected, or for further advisory, contact MetalMiner here.

More than a year and a half has elapsed since President Donald Trump, leveraging Section 232 of the Trade Expansion Act of 1962, imposed tariffs on imported steel and aluminum of 25% and 10%, respectively.

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Trump applied the tariffs using the Section 232 statute’s national security grounds language as justification. The power to adjust import levels via Section 232, while not used frequently since the passage of the 1962 legislation, falls under the authority of the president.

With that said, some members of Congress have proposed legislation that seeks to curtail the office of the president’s Section 232 authorities.

Last year, a bipartisan group of senators introduced legislation calling for congressional approval of tariffs introduced via Section 232. The bill requires the president to submit a proposal to Congress if the presidents seeks to adjust import levels. After submission of the proposal, Congress would deliberate over a 60-day period.

Earlier this year, Republican Sen. Pat Toomey of Pennsylvania sponsored the Bicameral Congressional Trade Authority Act of 2019; the bill was read twice and referred to the Senate Finance Committee on Jan. 31.

Within the metals world itself, one industry group suggests the Section 232 tariffs should come with a sunset clause.

In a letter addressed to Sen. Chuck Grassley, chairman of the Senate Finance Committee, and Sen. Ron Wyden, ranking member on the Senate Finance Committee, the Coalition of American Metal Manufacturers and Users (CAMMU) called for a “robust debate” regarding the continuation of the Section 232 steel and aluminum tariffs.

“On behalf of the members of the Coalition of American Metal Manufacturers and Users (CAMMU) and the undersigned trade associations representing industries affected by the 232 steel and aluminum tariffs, we are writing to urge you to include a sunset provision for current 232 national security tariffs in any comprehensive 232 tariff reform legislation considered by the Committee,” CAMMU wrote in the letter.

CAMMU argued the tariffs have negatively impacted the U.S. economy.

“After 18 months of the Section 232 steel and aluminum tariffs, it is clear that these tariffs are contributing to a weakening of the U.S. economy, particularly in the manufacturing sector,” the letter continued. “This is starkly reflected by the Institute for Supply Management’s key manufacturing index which fell to 47.8% in September 2019, the lowest reading since 2009. Price fluctuation, delivery delays and uncertainty caused by the tariffs are contributing factors to a slowdown in the manufacturing sector.”

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Members of CAMMU include: American Institute for International Steel, Associated Builders and Contractors, Industrial Fasteners Institute, the Hands‐On Science Partnership, the National Tooling & Machining Association, North American Association of Food Equipment Manufacturers, the Precision Machined Products Association, and the Precision Metalforming Association.

“We appreciate the desire for bipartisan, compromise legislation that has a chance of seeing Senate floor action this Congress,” CAMMU stated. “However, 232 reform legislation that does not allow for a robust congressional debate and decision on the current steel and aluminum tariffs would allow these tariffs that are causing actual harm to U.S. manufacturers to continue with no competent exclusion process in place and no future relief in sight. We urge you to include a sunsetting provision that addresses current 232 tariffs in the mark that goes before the Senate Finance Committee to allow for a debate on these harmful tariffs and to ensure all stakeholders have a voice in the process.”

The normally pragmatic Netherlands has been strangely agitated recently, as both the construction and agricultural industry have protested on the streets of the capital, the Hague, against the government’s measures for combating nitrogen and PFAS-based pollution.

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In itself this would barely be newsworthy for MetalMiner if it weren’t for the impact it is having on an already subdued metals industry.

Even before the widespread disruption to the Dutch construction industry, demand for steel and aluminum was suffering from depressed German industrial consumption, largely due to a downturn in the automotive market.

But in the Netherlands, the government is struggling to resolve an issue with nitrogen emissions permitting, which Reuters reports are four times the E.U. average per capita in the small and densely populated Netherlands.

Although 61% of emissions are coming from agriculture, a sizable portion also comes from the construction industry – a big consumer of aluminum and steel products.

The impact is particularly damaging, as the country has been enjoying a boom in infrastructure and housing investment of late.

As a result of a fiasco over how permits are assessed, a review is underway and, in the meantime, new permits have been withheld, leading to delays and project uncertainty.

Aluminum extruders estimate the European market is down at least 20% from last year as a result. With steel prices also waning, participants across the supply chain are reducing inventories, adding further to the fall in demand being experienced by producers.

Lead times have come in and order books are weak, as many in the steel and aluminum supply chains find themselves overstocked relative to ongoing demand. The double whammy of weak automotive demand now being exacerbated by a fall in construction activity has caught many by surprise.

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The government in the Netherlands will no doubt resolve its permitting issues. However, a return to last year’s robust level of activity is unlikely to bounce back quickly and producers remain pessimistic about demand next year.

In the meantime, prices are likely to remain under pressure and lead times will remain short into 2020.

The aluminum price is a contrary thing, isn’t it?

For months, aluminum prices have been falling on the basis that demand is waning due to slowing global growth (particularly in top consumer China).

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China’s gross domestic product growth slowed again to 6.0% year over year in the third quarter, its weakest pace in almost three decades, Aluminium Insider reports. Citing a Reuters poll, the report notes industrial activity is expected to have shrunk for the sixth month in October, quoting a Reuters poll, suggesting hardly any relief from slowing global demand and the trade war.

The latest economic data from the E.U. and the U.S. also indicate slowing growth, with Germany flirting with a recession in the manufacturing sector. Although the aluminum market was estimated to be in deficit last year and this, a Reuters poll suggests it is likely to flip into a surplus of 304,000 metric tons next year — almost a 1 million ton turnaround from the 658,500-ton estimate for this year.

The article went on to say the consensus among major producers is that global aluminum demand growth will be flat (around zero) this year. Norsk Hydro predicts demand outside China will fall by 1-2%, meaning global demand is likely to fall by 0.5%. Alcoa took a similarly pessimistic view.

So why has the aluminum price currently taken a run-up to nearly $1,800 per metric ton on the back of, Reuters reports, supply fears?

It would seem investors are somewhat jittery and struggling to read the fundamentals.

Talk of Rio Tinto having to reduce output (or worse, shut its New Zealand smelter due to high power costs) and China’s second-place Chalco closing 200,000 tons of capacity in Shandong for the same reason seem to have stoked fears a number of smelter cutbacks could lead to a shortage.

Investors also view falling LME and SHFE inventories as a sign of a tightening market.

Aluminum stocks in SHFE warehouses dropped to their lowest level since March 2017 at 278,736 tons, while LME aluminum inventories dipped to their lowest since Sept. 30 at 956,200 tons, according to Reuters.

On the flip side, top consumer China is importing more and more remelt alloy ingots as part of its raw material product mix, which is finding its way through to increased exports of low-priced semi-finished products. China exported 4.37 million tons of mostly semi-aluminum products in the first nine months of the year – 2.8% more than in the previous year.

Primary production may be marginally down, but China is still supplying the world with semis, depressing activity at domestic extrusions and rolling mills in Japan, Europe and, by extension, the U.S.

Although the U.S. doesn’t import Chinese extrusions or billet, material supplied from elsewhere that has been displaced by Chinese metal does find its way in. Extruders are suffering, as illustrated by the low billet premiums prevailing in the U.S. right now.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

While some polls have suggested aluminum prices could be back over $1,800 per ton next year if current conditions prevail, that looks unlikely.

More than just sentiment is being depressed by the trade war. With little chance of a resolution this side of the presidential election, manufacturing is unlikely to recover strongly enough to materially impact the supply-demand balance anytime soon.

photonewman/Adobe Stock

The Aluminum Monthly Metals Index (MMI) remained flat this month at 82, with the majority of prices in the index increasing mildly, offset by a few declining values.

The current index value remains near a three-year low.

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LME aluminum prices generally moved sideways in October but demonstrated strength late in the month, just as prices look set to drop through yet another support level of $1,700/mt. Prices hit as low as $1,713/mt during the month.

Source: MetalMiner analysis of London Metal Exchange (LME) and FastMarkets

That movement appears halted for now, due to supply disruptions and future supply concerns.

SHFE Aluminum Prices Failed to Gain Steam

SHFE aluminum prices still appear constrained by a sideways pattern capped at around CNY 14,500/mt price band, with upward momentum looking weaker as the year has progressed.

Source: MetalMiner analysis of Fastmarkets

Given recent positive PMI readings and improvements in China’s large-cap FXI, for instance, we should see aluminum prices react — unless excess supply exists in the market, stopping increased price momentum and/or demand remains weak in aluminum-intensive areas.

According to Q3 reporting for the Aluminum Corp of China Ltd, or Chalco, as reported by Reuters, aluminum sales dropped by 13.8% for the quarter, compared to Q3 2018, with sales totaling 940,000 tons. Production dropped 10.4% during the same period (July-September) to 950,000 tons.

The company reported significant raw material, energy and operating cost increases of late, ranging from 17% to 21%, during the quarter.

Chalco reported an average sales price of CNY 13,924/mt for Q3 2019, down by 4.2% compared to Q3 2018, with profits down by 47.7% for the first nine months of 2019.

Recently, prices dropped below CNY 14,000/mt — typically a critical break-even point for producers in China — to CNY 13,800/mt.

Supply Concerns Support LME Aluminum Prices

During the most recent round of corporate financial reporting, a couple of high-profile producers noted higher energy costs hurt profitability and indicated the need to upgrade production methods to more energy-efficient processes. The aforementioned is especially true given the energy-intensive nature of aluminum production, which will necessitate major investment costs.

Rio Tinto commented that closure of its aluminum smelter in New Zealand could be possible due to high energy costs hurting profitability.

Additionally, the price increase could have occurred as a result of speculative activity in that it coincided with a recent uptick in press reports covering aluminum as the green solution in the beverage can industry.

Coca-Cola’s Dasani brand of water will move to aluminum cans from plastic, joining PepsiCo’s move for its Aquafina brand. Ball, the jar company, recently created an aluminum cup to compete with plastic (now in test markets). The company began construction of its first dedicated aluminum cup manufacturing facility, with production expected to ramp up in Q4 2020.

Additionally, total LME warehouse stocks trended down to historical lows earlier this year and remained there, at around 1 million tons. SHFE stocks declined more dramatically this year, now down to under 300,000 tons from around 700,000 tons at the start of the year.

New LME Warehouse Rules Target Improved Data Tracking

The LME announced Nov. 1 it will proceed with a proposed package of measures aimed at the optimization of its warehouse network.

The new rules will require network warehouses to report stocks, even when stored outside of an LME location when that metal will be brought in at a later date.

Also, queue-based rent capping will increase to 80 days — from 50 days at present — over the course of nine months.

What This Means for Industrial Buyers

Aluminum prices found some momentum late in October, but what comes next remains unclear.

Buying organizations interested in tracking industrial metals prices with embedded forecasting should request a demo of the MetalMiner Insights platform.

Buying organizations seeking more insight into longer-term aluminum price trends may want to read MetalMiner’s Annual Metal Buying Outlook.

Free Partial Sample Report: 2020 MetalMiner Annual Metals Outlook

Actual Metal Prices and Trends

This month, China aluminum scrap prices increased by 2.4% to $1,805/mt, while Chinese aluminum primary cash prices increased by 1% to $1,975/mt.

Meanwhile, Chinese aluminum billet and bar prices declined by 0.8% and 0.7%, respectively, to $2,041/mt and $2,136/mt.

Korean prices showed strength across the board this month.

Korean commercial 1050 sheet increased by 2.4% to $3.04/kilogram, 5052 coil premium over 1050 increased by 2.2% to 3.21/kilogram, and 3003 coil premium over 1050 increased by 2% to $3.08/kilogram.

The LME primary three-month price increased by 1.6% over the course of the month to $1,747/mt after a couple of months of decline.

European commercial 1050 sheet and 5083 plate both increased again this month, rising by 0.8% and 1.4%, respectively to $2,475/mt and $2,837/mt.

India’s primary cash price dropped by 5.1% to $1.86/kg.

Norsk Hydro’s Alunorte refinery. Source: Norsk Hydro

Norwegian aluminum, alumina and bauxite producer Norsk Hydro scored a key victory in September when Brazil’s federal court lifted the final embargo on the firm’s Alunorte alumina refinery, allowing it to ramp back up to 100% capacity.

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The refinery had been subject to embargoes, particularly with respect to its DRS2 bauxite residue deposit area, after flooding in the region in early 2018. Alunorte declared force majeure in March 2019 after the Brazilian authorities ordered a 50% production cut.

With the embargoes in the rear-view mirror, the firm is now looking to ramp up production. The Alunorte refinery, boasting a capacity of 6.3 million metric tons per year, reached 83% capacity capacity utilization during the third quarter.

Hydro reported third-quarter underlying EBIT of NOK 1,366 million (U.S. $148.5 million), marking a 49% year-over-year decline, citing “a decrease in realized aluminium and alumina prices.”

However, the declines were partially offset by lower raw material costs and higher production in Brazil, the company said. Compared with the second quarter, underlying EBIT increased 56%.

“It is encouraging to see costs coming down in our upstream business, combined with forceful restructuring and optimization measures downstream. Amid challenging markets, it is more important than ever to focus our efforts on what we control ourselves. I am therefore pleased to report progress on our new and ambitious improvement programs, which is an important enabler for our profitability and sustainability agenda,” President and CEO Hilde Merete Aasheim said in a release.

By segment, underlying EBIT for Hydro’s bauxite and alumina segment fell 30% on a year-over-year basis, but increased 16% compared with the second quarter of 2019.

Underlying EBIT in extruded solutions increased 12% on a year-over-year basis, but declined 28% compared with Q2 2019. The extruded solution segment was hit hardest by a cyber attack that struck Hydro’s operations in March.

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“The cyberattack on Hydro on March 19, affected the entire global organization, with Extruded Solutions having suffered the most significant operational challenges and financial losses,” the company said. “The financial impact of the cyberattack is estimated to around NOK 550-650 million in the first half year with limited financial effects for the third quarter.”

Scanrail/Adobe Stock

This morning in metals news, global aluminum associations are calling for action on market-distorting activity, China’s semi-finished steel imports skyrocketed in September and Freeport-McMoRan reported its 3Q 2019 results.

Keep up to date on everything going on in the world of trade and tariffs via MetalMiner’s Trade Resource Center.

Aluminum Associations Demand Reforms

Yesterday, we noted steel associations around the world are asking governments to tackle the challenge of steel excess supply.

Now, aluminum associations are asking for reforms of their own, particularly in an effort to tackle activities that distort markets.

Jean Simard, president and CEO of the Aluminium Association of Canada; Gerd Götz, director general of European Aluminium, and Ryan Olsen, vice president of business information and statistics for the Aluminum Association, released a joint statement asking for action on the matter.

“Given the extent and duration of the harm suffered by the aluminium industry, we are calling for swift, focused and decisive action on market-distorting behavior and excess capacity in both the upstream and downstream sectors,” they said. “On behalf of our respective member companies, we stand ready to support Governments and international organizations with our knowledge, data and commitment to articulate improved trade rules and to restore normal market functions so that all producers throughout the aluminum value chain can compete under conditions of fairness and transparency.”

China’s Semi-Finished Steel Imports Jump in September

China’s imports of semi-finished steel increased in September amid new restrictions earlier this year on scrap imports, Reuters reported.

According to the report, China imported 370,000 tons of semi-finished steel in September, which marked a 418% year-over-year increase.

Freeport’s Copper Sales Fall in 3Q

Miner Freeport McMoRan reported its third-quarter financial results Wednesday, reporting an adjusted net loss of $8 million.

Sales of copper and gold in the third quarter were down on a year-over-year basis “reflecting anticipated lower mill rates and ore grades as PT Freeport Indonesia (PT-FI) transitions mining from the open pit to underground,” according to the firm.

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Third-quarter copper sales reached 795 million pounds, down from 1.0 billion pounds in 3Q 2018. Gold sales totaled 243,000 ounces, down from 837,000 ounces in 3Q 2018.

According to the International Aluminum Institute, global aluminum production totaled 5.16 million tons in September, down from 5.33 million tons in August and 5.30 million tons in September 2018.

Despite the decline in production, prices have not received a boost — in fact, the LME aluminum price per pound is hovering at around $0.78 per pound.

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Top producer China saw its production levels dip again last month.

Chinese aluminum production totaled an estimated 2.88 million tons, down from 2.97 million tons in August and 3.01 million tons in September 2018.

North American aluminum production reached 310,000 tons, down from 321,000 tons in August and flat compared with September 2018 production.

Asian production ex-China reached 363,000 tons, down from 374,000 tons in August and 364,000 tons in September 2018.

GCC production totaled 456,000 tons, down from 469,000 tons in August but up from the 437,000 tons produced in September 2018.

Production in eastern and central Europe totaled 344,000, down from 356,000 tons, but up from the 332,000 tons produced in September 2018.

Western European production totaled 276,000 tons, down from 286,000 tons in August and the 312,000 tons produced in September 2018.

In terms of prices, LME three-month aluminum is down 2.86% over the last month, down to $1,731/mt.

“LME aluminum prices weakened in September, despite looking stronger early on in the month,” MetalMiner’s Belinda Fuller explained earlier this month. “Less robust manufacturing and economic indicators hurt some industrial metal prices this month, including aluminum. The stronger U.S. dollar also resulted in weaker prices.

“LME prices look close to possibly dropping below yet another critical price level, $1,700/mt, after clearly breaking the $1,800/mt support level since last month.”

Chinese aluminum prices have also been on the decline of late. SHFE primary cash aluminum recently fell to 13,960 CNY per ton, down from 14,280 CNY per ton a month ago, according to MetalMiner IndX data.

LME prices have picked up slightly in recent days, but not substantially. With Chinese production now posting monthly declines for two straight months, it remains to be seen if that supply-side activity will have a supportive impact on prices.

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So far, that doesn’t seem to be the case.

Of course, the demand picture must also be figured into any industrial metal’s forecast. The IMF recently downgraded its 2019 global growth forecast to 3%, its lowest level since the financial crisis — an ill omen for demand of a wide range of goods, including industrial metals.

Automotive demand for aluminum — among other metals — is a large source of the metal’s overall demand. As the IMF’s World Economic Outlook released this month notes, a slowdown in No. 1 automotive market China has weighed on aluminum prices.

Referring to the period between February and August of this year, the IMF noted, “The price of aluminum fell by 6.6 percent because of overcapacity in China and weakening demand from the vehicle market there.”