The Aluminium price experienced a remarkable surge last week, outperforming other LME metals with a 7.5% increase. This upward trend was fueled by the anticipation of potential interest rate cuts in the US, as highlighted by Commerzbank’s commodity analyst Barbara Lambrecht.
Aluminium Prices Dip Today After Recent Rally
Despite the recent rally, concerns about supply emerged following a significant rise in the futures price of alumina on the Shanghai Future Exchange. This surge was triggered by a notable decrease in inventories on the SHFE. While previous spikes in alumina prices had driven Aluminium prices up, history repeated itself as alumina prices began to decline once more.
Looking ahead, experts believe that while Aluminium remains well supported due to limited capacity expansions in China and positive medium-term demand outlook, the recent rapid price increase may have exhausted its short-term upside potential. As a result, Aluminium prices are showing a slight decline after yesterday’s trading session on the LME.
Analysis and Impact:
For investors, the recent surge in Aluminium prices signifies both opportunities and risks. While the metal’s demand is expected to remain robust in the coming years, the rapid price increase may lead to short-term corrections. Keeping a close eye on market developments and supply dynamics will be crucial for making informed investment decisions in the Aluminium sector.