REVIEW OF 2011: Eurozone turmoil prompts adaptation of 2012 aluminium market
Dec 27, 2011 | 08:42 PM
The eurozone debt crisis has clouded the outlook for 2012 and forced aluminium producers to become more adaptable to the volatile market dynamics than in previous years.
The aluminium and other base metal prices have become so tied to the fate of the European economies that it is not only long-term contract business that is being hampered but the market’s ability to forecast prices and demand as well.
“There’s so much uncertainty now, and we’re looking at a bunch of numbers that are not worth that much anymore,” one aluminium producer said. “People are hoping it won’t all crash, but they’re preparing for the worst.”
The European Central Bank (ECB) warned on December 19 that the eurozone crisis could endanger financial stability around the world, and that European governments and banks will, over the next few months, be competing with each other for billions of dollars in refinancing.
ECB president Mario Draghi told the European parliament that around $500 billion in outstanding bonds will be coming due in the eurozone over the next quarter, and that the pressure the region’s....
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