LME aluminium prices have been relatively volatile over the past month, with periods of steadily rising prices followed by large downward corrections. Three-month aluminium reached a high of 1,772 dollars/tonne (80.4 cents/lb) on April 2, but subsequently struggled to make further gains and slipped back to 1,719 dollars/tonne (78.0 cents/lb) on April 6. After progressively rising higher again, the market exploded on April 14, with fund buying driving three-month prices from a low of 1,749 dollars/tonne (79.3 cnets/lb) to close the day at 1,792 dollars/tonne (81.3 cents/lb) - setting a new eight-year high. The market continued to rise higher, reaching 1,844 dollars/tonne (83.6 cents/lb) on April 20, driven by further fresh fund buying and short covering, supportive fundamentals and tightening nearby spreads. Some hypothesised that conditions were in place for aluminium to head higher, perhaps even to test 2,000 dollars/tonne (90.7 cnets/lb) - a level not seen since 1995. However, by the next day, market sentiment had turned sharply from bullish to bearish, causing three-month prices to fall to a low of 1,683 dollars/tonne (76.3 cents/lb) on April 21. Fears that rising US inflation could result in higher interest rates, a surge in US dollar strength, and concerns that Chinese economic growth may slow sharply this year, sparked massive long liquidation from the speculative community.
展开▼
