Sean Gallup/Getty Images News
Aluminum prices fell to their lowest in more than a year on Tuesday on expectations of rising supply from China where smelters have been ramping up production.
According to Reuters, benchmark aluminum (LMAHDS03:COM) on the London Metal Exchange recently was -0.4% at $2,370/metric ton, after falling to a low as $2,352/ton, the lowest price since May 2021.
Primary aluminum production in China reached a record 3.42M metric tons in May, up 3.1% Y/Y and slightly above the 3.36M tons produced in April.
Combined with weaker aluminum demand, partly due to coronavirus lockdowns in China, some analysts have trimmed their forecasts for large surpluses this year.
However, supporting aluminum prices are 20-year lows in stockpiles in LME-registered warehouses, at 340,375 metric tons.
Most base metals including copper again trade lower on the LME on Tuesday.
ETFs: (NYSEARCA:JJU), (COPX), (CPER), (JJC), (JJCTF)
Alcoa (NYSE:AA) -2.5% in early trading on Tuesday; (CENX) -1.8%.
Goldman Sachs analysts have been bullish on commodities, and especially on copper, but now they see recession risks in developed economies causing demand pessimism for the rest of 2022, according to Bloomberg.
Goldman still sees copper reaching $15K/ton in 2025, citing a "clear structural bull story" as mine supply peaks, but the bank trims its price forecast to $7,600 in six months and $9,000 in 12 months, vs. previous forecasts of $10,500 and $12K, respectively.
Spooked by recession fears, copper prices plunged more than 20% in Q2, the metal's biggest quarterly decline since 2011.