Aluminium for delivery in three months on the London Metal Exchange fell to a low of $1,279 a tonne – the lowest level since November, 2001. Record high stocks were responsible for the overwhelming downward pressure. Aluminium LME warehouse inventories leapt by 13,125 tonnes to stand at 3.17 million tonnes, their highest ever.
Aluminum prices are near five-year lows as orders drop from automakers, builders and appliance manufacturers. The global recession, collapsing consumer and corporate confidence and plunging demand for industrial metals have combined to drop the aluminum prices on the LME to their lowest monthly rate since April 2003.
If there was anyone who had reason to celebrate the failed BHP takeover of Rio Tinto, it would be China, and more specifically Chinese smelters. Last February, Aluminum Corp. of China together with Alcoa, paid $14.1billion for a 12% stake in Rio-Tinto’s London listed shares. Conspiracy theorists said the move was engineered by Beijing.
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.
The preparations for the 2008 Summer Olympics in Beijing, China, have impacted commodity spot prices worldwide: aluminum consumption in China is at near-record heights, and continues to surge.
Get our independent commentary on aluminum trends and companies delivered to your inbox.
