Metalnewsnet 18 Mar:

Analyst as saying that aluminum prices will continue to be underpinned near term by steadily improving demand and a tight physical market. But production is rising and some see prices succumbing to downward pressure further ahead as it becomes clear that the market is on course to record another big surplus this year.

Mr. Olivier Masson a consultant at CRU Group said that prices in the month ahead should find some support at current levels, as the physical market remains tight. The fact that a lot of inventory at present is tied up in LME warehouses under financing contracts is supporting physical tightness.

Mr. Dan Smith analyst of Standard Chartered said that he had a relatively upbeat view on demand in top consumer China. And the rest of the world is starting to pick up the baton a bit on growth.

Mr. Smith expected prices to weaken further ahead, but saw room for a bit more strength short term, helped by steadily improving demand. But production is rising, even though companies outside China, which idled capacity in response to the global recession, appear cagey about restarting.

Mr. Angus MacMillan independent consultant said that world production is going to rise pretty strongly this year. We're heading for another bumper surplus and pressure on prices will be down. He said that first support for the metal is at USD 2,000 per tonne or USD 1,950 per tonne, which could give way sometime in the Q2 with next support at USD 1,800.

The London Metal Exchange 3 month’s aluminum price was last indicated at USD 2,240 per tonne to USD 2,250 per tonne. Below are some of the more significant recent developments in production and prices that may continue to influence the direction of the market in 2010. (Source: World Scrap)

Editor: KylinTse