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Forecasts and market analysis based on price assessments from Fastmarkets MB and Fastmarkets AMM

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March 2017 | Base Metals


Aluminium: Momentum still to the upside


Aluminium prices maintain their surprisingly bullish tone, though we are still looking for a strong pick-up in Chinese production between now and the planned winter capacity cuts. We are also looking for higher exports from China this year too, albeit mostly in the form of semis. Neither trends are fundamentally bullish, and we maintain that off-market stocks of primary metal are high, so we remain wary of the aluminium price rally against this backdrop.

Price uptrend proving resilient
Dip-buyers have re-engaged with the commodities sector and base metal prices rose after the dovish tone from the Fed and a resultant weaker dollar. The Dutch general election result also helped to calm markets last week, enabling sentiment to improve and risk assets to advance. Aluminium was up 0.5% on the week, also aided by falling LME stocks.

China February output drop just a blip

According to the IAI, total aluminium production in China in January reached a record high at 2.95m tonnes – a daily rate of 95,200 tonnes, compared with 2016’s average of 86,500 tonnes. February production is inferred to have been 2.535m tonnes, or 90,536 tpd, a 4.9% month-on-month fall. It makes sense...

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