Metals News
[Al] LME Aluminum Inventories Close to Two million mt, SHFE Aluminum Decline to Limit Again
industry news
01:16PM
Dec 7,2009
Source:SMM

SHANGHAI, Dec. 17 (CBI China) -- On December 17th London Metal Exchange (LME) announced the latest inventory data, as of December 16th, aluminum stocks reached 1,942,700 mt. In fact, since December, LME aluminum stock has surged by nearly 120,000 mt. Affected by this news, the Shanghai Futures Exchange (SHFE) aluminum contract prices declined to limit again yesterday. 
Although CEO of the world's largest aluminum producer Russian RUSAL boasted on Monday that they would cut production by 4% (about 180,000 mt), but aluminum prices have not improved. During Asian trading hours yesterday, SHFE aluminum contract 0903 declined to limit in the trading, falling to a minimum of RMB10,335/mt, and closed at RMB 10,400/mt, down RMB 390/mt compared with the clearing price in the previous trading day, with a drop of 3.61%. The insider said that the only way to completely break down the situation of the falling aluminum prices and increasing inventory is to eradicate excess production capacity. The increase in inventory is only surface reason, and the root reason for the decline in aluminum prices is the sluggish global automotive industry. Although the vast majority of aluminum producers are in the state of “losses” at the current price levels, this does not mean that the producers will cut production, on the contrary, they will continue to carry out production in the view of the maintenance of production lines and the pay benefits of the worker and other factors. In the short term the only way to help the aluminum price stabilize is the industrial integration and upgrading.

    (Edited by CBI China)

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