October 28 international aluminum prices fell to six-year low, as traders on the aluminum market this year and next year may be serious excess supply and a sharp cut is unlikely to feel nervous.
Index on the London Metal Exchange (LME) three-month aluminum (10315, -115.00, -1.10%) in early trading fell to its lowest level in June 2009 of US $ 1,460 per ton, later rebounded to $ 1,484, closed up 0.5 percent.
Macquarie analyst Vivienne Lloyd said, “The fundamentals of aluminum is very challenging, we have not seen any real large-scale production, the problem is that we are waiting for others to act first.”
A survey conducted by Reuters this month, analysts on average expect the aluminum market, excess supply 815,000 tons this year, the estimated range of 44-161.7 million tons. Global aluminum consumption this year is forecast at about 54 million tons.
Root of the problem of excess supply is China, China has the world’s most modern, but also the lowest-cost smelters. China has many high-cost plants, though at a loss, but continued to produce large amounts of aluminum.
The world’s largest aluminum producer, United Company Rusal confirmed that the company is evaluating a number of the aluminum business. The company produced 91.6 million tonnes of aluminum in the third quarter, an increase of 1% in the first three quarters of production increased by 1.4% to 2.7 million tons of aluminum.
A trader said, “UC RUSAL said previously cut, but so weak ruble, why cut it? Aluminum prices, but they are more dollar-convertible ruble, their cost is calculated in rubles . ”
Marex Spectron data also point to the aluminum market bearish sentiment, more speculators in October 22 Short aluminum. Marex said the latest estimates show that aluminum speculative short interest increased 45,000, to 158,000.
After the market close, the Fed announced to keep interest rates unchanged, but played down the negative impact of the global economic factors, in December to retain the possibility of tightening monetary policy at a meeting.