Lower aluminum prices may spur January buys

Dec 15, 2011 | 03:56 PM | Suzy Waite

Tags  Alcoa, Century Aluminum, aluminum prices, Suzy Waite

NEW YORK — Aluminum prices slumped this week to lows last seen in July 2010, and while cautious buyers are hesitant to stock up on discounted material ahead of year-end bookkeeping, a prolonged pullback could incite a buying spree in the first few weeks of January, market sources told AMM.

Cash aluminum prices settled below the symbolic $2,000-a-tonne mark for a second straight day Thursday, closing Wednesday at $1,976 per tonne—just above the July 21, 2010, price of $1,975.50—before rebounding slightly to $1,982.50 per tonne Thursday. Despite the modest bounce, Thursday’s close was still down nearly 30 percent from 2011 highs near $2,800 per tonne in late April.

Traders said they have seen some buying interest this week as a result of the multi-month lows. "Certain customers are going out and seeing the price and taking advantage, for sure," one trader told AMM.

"There’s some buying interest, of course," a second trader said. "(Aluminum prices are) at the lowest point in a very long time."

Nonetheless, most suppliers said they do not expect consumers to purchase much metal as December winds down as most consumers want low inventories on Dec. 31 for tax purposes.....