The price of aluminum has slumped some 50 percent since peaking at $3,380 per tonne last July as the global economic downturn has hit demand for the metal. To kick off 2009, the aluminum market received some positive news as the metal climbed to a three-week high in Shanghai trading.
At aluminum’s current price around 90% of the world’s smelting capacity is operating at a loss, and this is forcing producers to revise production programs to cope with aluminum’s current price point.
The precipitous drop in commodity prices is putting companies under pressure, particularly feeling the squeeze are oil and metal mining companies. To be optimistic we must note that even though the current conditions are dire, the seeds are being sowed for another big rally in the metals.
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