ALUMINIUM CAN BE A TRUMP IN SLUMPING MARKETS, PRODUCERS CUTTING OUTPUT
Date: 12/04/2012
Aluminium can be a good bet in these uncertain times among all the major riskier assets. Although Gold is giving reasonable returns for hedgers and speculators, its prices are quite on the higher side. Among its own peerset of Base metals, Aluminium has been much more stable and apprehended the weak trend well than counterparts.
International producers have been cutting their production offlate on account of higher power prices and higher operating costs. Alcoa, Rio Tinto and Rusal have announced closure of 1 million tons capacity. The consumption was more than 6% in Q3 2012 compared to Q3 2011. In this growth, only Europe is left behind due to its own debt problems, rest of the world is growing with China in a double digit growth.
Chinese imports figures had a slight decline in the month of March compared to February. But compared to March 2011, unwrought Aluminium and products imports were up by 37% at 120494 tons.
LME benchmark Aluminium prices have averaged at $ 2089 per ton in Q3 2012, this is a drop of 13% from the previous quarter. The price is currently at $ 2104 per ton. LME stocks are currently holding at 5050925 tons, up by 72175 tons in 2012. Warehousing deals are viable these days and lower interest rates are causing stocks to be shifted in the warehouses.
Markets are expected to remain stable to upwards from hereon on account of production cuts. Prices are also at attractive levels and is bringing pick up of demand. North America and China is expected to be major consumers of Aluminium.
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