Aluminium price declined sharply both inside and outside China after Chinese spring festival holiday. The price drop ranges of London aluminium and Shanghai aluminium are near 9% and 3%. Meanwhile alumina price in China keeps falling. Market prices in Shanxi, Shandong and southern China are near even lower than cost price. The pressure of output reduction is getting high.
Factors like weak demand, funding pressure, falling economy situation and especially the dumping aluminium inventory acts of European banks, all give aluminium even metal prices bad effects. Chinese and global metal markets and economy situation of every country are facing operation problems and export pressure and other similar difficulties. Thus, discussions of new currency wars become more and more frequent.
All the countries are facing risk of devaluation. Although facing overproduction problems, as products that can be reserved for a long time, base metals shouldn’t have such large price drop ranges at this very moment. That gives people a feeling of artificially depress. It seems like that only banks have this ability to bring down metal price before the currency war storm. Plus this round of aluminium price drop was triggered by banks’ selling inventory acts. As to if it’s a false appearance manipulated by people, nobody knows.
From present situation, although this possibility can’t be completely excluded, the feasibility is small. Global market is too complicated and it’s not operated by only one person. So this action is too uncertain. Time span and capital cost is too high. If it is not artificially operated, this round of metal price drop may be the sign of economy crisis, because banks had no choice but to sell inventories. If this assumption is true, then market prospect would be terrible. Future aluminium price may continue to fall, even beyond imagination. There will be a possibility that Aluminum price may fell to the price interval appeared 10 years ago.
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