Pendulum swings in favour of aluminium demand and prices

LONDON (Reuters) – Flourishing aluminium demand in China and the United States, higher freight costs and tight scrap supplies are expected to fuel further rises in prices of the metal used in the transport, packaging and construction industries. Benchmark aluminium on the London Metal Exchange at around $2,050 a tonne is near the $2,080 hit earlier this month, the highest since October 2018 and up 40% since April when industrial activity and demand stalled due to coronavirus lockdowns. Since then, relaxing of restrictions and economic and fiscal stimulus, particularly in China, have boosted growth and demand. “There has been a sharp swing in economic activity and aluminium demand and that is reflected in prices,” said Jorge Vazquez, founder of consultancy Harbor Aluminum. Vazquez expects LME aluminium to reach at least $2,200 before the end of the first quarter 2021. Physical market premiums paid on top of the LME price have also climbed. In the United States, higher trucking costs, less scrap and expectation that tariffs would be reimposed on aluminium imports from Canada have helped the duty-paid premium rise more than 15% to above $300 since October. “Canadian exports of aluminium to the United States exceeded October’s hard export quota… continue reading

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