Sunday, February 24, 2013

Aluminum Prices Post Biggest Weekly Decline in 14 Months

Aluminum fell, capping the biggest weekly drop in 14 months, on signs that increasing output in China will add to a global glut. Global output increased 5.7 percent in January from a year earlier to 3.917 million metric tons, the International Aluminium Institute said Feb. 20. Chinese production surged 16 percent, the IAI figures showed. Production exceeded demand by 419,400 tons last year, figures from the World Bureau of Metal Statistics showed this week. “The high production is not helping reduce the supply surpluses on the global aluminum market, which are still reflected in high inventory levels,” Commerzbank AG analysts including Frankfurt-based Daniel Briesemann said in a report. “The high supply is likely to block any significant increase in aluminum prices.” Aluminum for delivery in three months dropped 1.3 percent to settle at $2,048 a ton on the London Metal Exchange at 5:51 p.m. local time. This week, the price tumbled 5.5 percent, the most since late November 2011. The commodity fell for the fifth straight day, the longest slump in two months. Inventories monitored by the LME climbed 0.1 percent to 5.16 million tons, the highest in more than three weeks. Copper for delivery in three months fell 0.8 percent to $7,801 a ton ($3.54 a pound). This week, the price plunged 4.9 percent, the most since December 2011. The metal dropped for the sixth straight session, the longest slump in two months. Zinc and lead declined, while nickel gained. Tin was little changed. In New York, copper futures for May delivery decreased 0.5 percent to $3.5505 a pound on the Comex. Yesterday, total volume rose to a record 128,326 contracts, topping the previous all-time high of 127,276 on April 10, CME Group Inc., the Comex owner, said today. On Feb. 6, open interest jumped to a record 184,257 contracts, Chicago-based CME Group said.

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