At the start of 2006 aluminium prices were 925 dollars/tonne off their record high of 3,200 dollars/tonne, seen in 1988. The gap is closing fast and the highs are now only about 550 dollars/tonne away. This raises the question of whether the highs will be challenged in this leg of the rally, or will prices need to consolidate first? Bullish sentiment and recent momentum suggests there may be no stopping this rally just yet. However, there has been a wobble in recent days, and given the speed of price rise so far this year, combined with rising stocks and easier spreads, the market may well need time to consolidate before tackling any significantly higher levels.
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