A slump in aluminium prices this year reflecting a global economic slowdown may be “nearing a bottom”, according to traders, producers and analysts, who are growing increasingly bullish about demand for the metal from burgeoning clean technologies.
The aluminium futures benchmark on the London Metal Exchange has fallen nearly a fifth since its January peak, and more than 40 per cent from last year’s highs — largely due to economic weakness in Europe and the US, and poor construction demand in China.
But many producers and traders are growing increasingly bullish in the medium-term, forecasting growing demand for the metal from makers of electric vehicles and solar panels. Aluminium prices this month experienced their largest contango since the financial crisis, meaning metal bought today is at a discount to future prices. This reflects weak spot demand, as well as the expectation that future prices will be higher than today.