Aluminium’s future looks dim in the absence of significant supply cuts
It’s been a bad year for the base metal, with demand having slowed for a decade even before the virus crisis struck
Aluminium isn’t the worst performing base metal in 2020, an honour that goes to copper. Yet that’s only because it had less far to fall: demand was ailing well before the coronavirus forced about 3- billion people to stay at home. Add the near-total shutdown of the world’s auto and aviation industry, crunching more than a third of demand, and the lightweight metal is fast heading for levels last seen during the global financial crisis. That should translate into some of the mining industry’s deepest cuts as the pandemic forces producers such as Alcoa and Rio Tinto to take long-overdue decisions.
Aluminium is a serial underperformer, having racked up the biggest real losses for any base metal since 1913, according to Bloomberg Intelligence. Demand has slowed for a decade, and a surplus was expected in 2020 even before the current crisis. Prices have declined for eight consecutive weeks to below $1,500 per metric tonne. That’s made most of the world’s production unprofitable.....
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