LME aluminum

Last week, aluminum prices on the London Metal Exchange fell below $1,500 per metric ton for the first time in more than 6 years.

Aluminum 3M LME below $1500-mt

3-month LME aluminum is now below $1,500 per mt. Source: MetalMiner analysis of FastMarkets.com data.

The Aluminum Association commented this month to the US-China joint presidential statement as good progress on environment but also said more needed to be done regarding China’s overproduction.

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The new environmental law implementations promised by the presidential statement should provide incentives for carbon-intensive aluminum smelters in China to be weeded out.

It still looks like the market doesn’t have high expectations for aluminum. The oversupply in China continues to hit investor sentiment and analysts don’t expect China’s aluminum producers to close capacity anytime soon, despite the fact that many of them are underwater. China keeps adding production in its western provinces, where coal-based power is cheap.

Aluminum producers in the US are getting hurt the most, facing one of the darkness periods in aluminum history. The low price damage convinced Alcoa, Inc. split into 2 companies. The firm has found that its legacy smelting business, the company’s vertically integrated structure, is not the advantage it once was.

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Aluminum hitting another price low just adds to the already bearish sentiment across metals markets. We can’t expect metal prices to turn around yet while we see this sort of weakness in individual metals like aluminum.

The monthly Aluminum MMI® registered a value of 77 in September, a decrease of 3.8% from 80 in August.

Aluminum_Chart_September-2015_FNLThe 3-month London Metal Exchange aluminum price fell as low as $1,506/mt, the lowest level in more than 6 years as the continuous sell-off in Chinese shares is raising worries about a slump in aluminum demand from the world’s largest aluminum consumer.

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The latest trade data provided more negative news from China for the commodity sector, showing that China’s industrial slowdown is sharpening. Weaker demand from overseas buyers helped to further aggravate the trade slide in August. Read more

The monthly Aluminum MMI® registered a value of 80 in August, a decrease of 3.6% from 83 in July.


The combined impact of stronger output and weaker demand from China are adding to the global aluminum surplus. Chinese exports remain strong (up 35% year-on-year in the first half of the year) and the recent Chinese stock market sell-off has only raised worries about a bigger-than-expected economic slowdown and the latest figures seem to agree with the market.

Purchasing Down Again

China’s July flash Purchasing Managers’ Index came in at 48.2. China’s PMI has been below 50 for five consecutive months. Figures below 50 are generally associated with a fall in manufacturing activity.

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Mix all this information together, add a strong dollar and a falling commodity market and there you have it: Aluminum prices hit a fresh six-year low.

With aluminum now nearing $1,600/mt, prices are close to or below the cost of production for a big portion of global capacity. This is hurting the profitability of aluminum producers and investors are well aware of that.

Producers Predicting Surpluses

Alcoa, Inc., recently raised its forecast for the global aluminum surplus, expecting a surplus of 760,000 metric tons this year which is almost double Alcoa’s previous forecast. The aluminum giant managed to offset declines in aluminum prices through its growth in its aerospace, automotive and alumina businesses. However, that hasn’t changed the minds of investors who have contributed to Alcoa’s shares dropping 40% year to date. Read more

Weak demand, a flood of Chinese exports and robust Western supply, in spite of earlier smelter closures, have created a perfect storm of surplus in the aluminum market.


Shares of Alcoa Inc. stock have been collapsing over the past few months, falling more than 20% in only 8 weeks. Read more

Aluminum has had quite a depressing month.

A flood of Chinese exports, weak demand and robust Western supply in spite of earlier smelter closures have all contrived to leave the market in primary surplus. As such, MetalMiner’s monthly Aluminum MMI®, tracking aluminum prices across the globe, registered a value of 86 in June, a decrease of 4.4% from 90 in May.


Compare with last month’s trends – download the free May MMI report.

China’s aluminum output rose to a record 2.59 million metric tons in April, according to the National Bureau of Statistics. The world simply can’t rely on China to restrain output. Aluminum prices might need to fall further in order to cause further non-China closures to balance the market. UC Rusal cited the rising tide of Chinese aluminum exports as a main concern in the producer’s first-quarter earnings report, which could increase in light of China removing a 15% export tax on aluminum products.

Read more

MetalMiner’s aluminum price index, the monthly Aluminum MMI®, registered a value of 90 in May, a significant increase of 2.3% from 88 in April.


Aluminum on the London Metal Exchange is back above $1,900 per metric ton, breaking short-term resistance to hit a four-month high. Read more

Aluminum has slowly and quietly regained some of the price strength it closed out 2014 with, but that might not be enough to pull the light metal out of this bear market.


The monthly Aluminum MMI® registered a value of 88 in April, an increase of 1.1% from 87 in March.

The Strongest of A Weak Metals Field

Aluminum prices remained rangebound in March. Compared to the rest of base metals, though, aluminum is holding its price very well. Indeed, aluminum and zinc are the only metals that haven’t made multi-year lows yet in 2015.

Read more

Alcoa Inc. said it would acquire Pittsburgh-based RTI International Metals Inc., one of the world’s biggest makers of fabricated titanium products for the aerospace and automotive industries, in a transaction with an enterprise value of $1.5 billion.

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For New York-based Alcoa, the world’s biggest aluminum producer by value, the stock-for-stock deal is part of its strategy to focus more on manufactured products for the aerospace and automotive industries.

Alcoa wants to become less reliant on its old-fashioned smelting business, which is suffering from weak prices for raw aluminum. Alcoa on Friday said it would look at closing up to 14% of raw smelting capacity. Since 2007, it has taken almost a third of its smelting capacity out of production.

RTI shareholders will receive 2.8315 Alcoa shares for each RTI share, representing a value of $41 per RTI share based on Alcoa’s closing price on Friday. RTI shares, which closed Friday at $27.28, jumped 28% to $35 in premarket trading Monday.

The cash price of primary Indian aluminum saw a 0.3% drop on Friday, March 6, landing at INR 112.45 ($1.80) per kilogram and making it the biggest mover of the day. On the LME, the aluminum 3-month price rose 0.1% to $1,806 per metric ton. On the LME, the cash price of primary aluminum held steady around $1,787 per metric ton.

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Chinese aluminum prices were mixed for the day. The cash price of Chinese aluminum saw a 0.2% decline to CNY 12,810 ($2,044) per metric ton. Chinese aluminum billet prices saw a 0.2% decline to CNY 12,820 ($2,046) per metric ton. Chinese aluminum bar finished the day down 0.1% to CNY 13,600 ($2,170) per metric ton. The price of Chinese aluminum scrap held steady at CNY 12,500 ($1,995) per metric ton.

Alcoa Inc. on Friday said it is considering curtailing aluminum smelting and refining operations via closures and divestment as part of a continuing effort to improve its profitability.

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Over the next year, Alcoa said it would consider curtailing, shutting down or shedding up to 14% of its global smelting capacity and 16% of its refining capacity. The company said has already idled some of its operations.

The New York-based aluminum firm with major operations in Pittsburgh has been benefiting from past efforts to close unprofitable smelters in high-cost areas. The company said it has curtailed, closed or sold about 31% of its highest-cost global smelting capacity since 2007.

Following a two-day decline, the cash price of primary Indian aluminum climbed up 0.5% to end at INR 112.80 ($1.81) per kilogram on Thursday, March 5. On the LME, the aluminum 3-month price increased 0.4% to $1,803 per metric ton. At $1,786, the cash price of primary aluminum finished the market day on the LME up 0.2% per metric ton.

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Chinese aluminum prices were flat for the day. The cash price of Chinese aluminum showed little movement yesterday at CNY 12,830 ($2,045) per metric ton. Chinese aluminum billet saw little change in its price on Thursday at CNY 12,840 ($2,047) per metric ton. Chinese aluminum bar held its value yesterday at CNY 13,620 ($2,171) per metric ton. For the fifth consecutive day, the price of Chinese aluminum scrap held flat at CNY 12,500 ($1,993) per metric ton.

This week the London Metal Exchange and several Wall Street banks saw an aluminum price lawsuit by purchasers thrown out by a Federal Judge in New York.

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US District Judge Katherine Forrest in Manhattan rejected claims brought by aluminum purchasers against several defendants including Goldman Sachs Group Inc., JPMorgan Chase & Co., Glencore Plc, and Hong Kong Exchanges and Clearing Ltd., which owns the London Metal Exchange.

Forrest said she will issue a decision later involving other defendants, including Detroit-based warehouse operator Metro International, which Goldman once owned.

The week’s biggest mover on the weekly Aluminum MMI® was the Indian aluminum cash price, which saw a 1.8% increase to INR 112.80 ($1.81) per kilogram. This comes on the heels of a 1.6% decline the week prior. The primary aluminum cash price rose 0.1% on the LME to $1,786 per metric ton after falling 0.8% during the previous week. The aluminum 3-month price rose 0.1% on the LME to $1,803 per metric ton after falling 1.0% during the previous week.

* Get the complete prices every day on the MetalMiner IndX℠

Chinese aluminum prices were mixed for the week. Chinese aluminum billet fell 0.8% over the past week to CNY 12,840 ($2,047) per metric ton. With a 0.6% decrease, the Chinese aluminum cash price closed the week at CNY 12,830 ($2,045) per metric ton. The price of Chinese aluminum bar declined 0.6% over the past week, settling at CNY 13,620 ($2,171) per metric ton.

European 5083 plate prices were off slightly at EUR 2,865 ($3,198) per metric ton, down from EUR 2,897 ($3,293) a week ago. Following a 0.8% increase, Korean 1050 aluminum sheet finished the week at KRW 3,816 ($3.46) per kilogram. The price of Korean 3003 coil premium over 1050 sheet increased by a slight 0.5% over the past week to KRW 3,866 ($3.51) per kilogram. Closing at KRW 4,016 ($3.65) per kilogram for the week, Korean 5052 coil premium over 1050 sheet rose by a slight 0.5%.

The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.

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