Aluminium is the most widely used non-ferrous metal. Over the decades, aluminium consumption growth has outpaced all other metals. The world’s leading aluminium market is China and other major consumers of aluminium are Japan, Europe and the US. The main industries with highest aluminium consumption are construction, transport and packaging. In the developed countries, the demand for aluminium comes mostly from the rapidly growing transport industry, which is driven by an expanding auto market. Additionally, developing countries are expanding their infrastructure; therefore, the demand from the construction sector has been upbeat. Aluminium prices have soared around 24 per cent on a YTD basis. Aluminium, like other commodities, is driven by an underlying demandsupply equation. The year 2016 was the first year in a decade when aluminium markets entered into a supply deficit. Better-than-expected Chinese demand coupled with lowerthan-expected Chinese supply supported aluminium prices. Considering that China accounts for nearly 60 per cent of global production of aluminium, the Chinese government's crackdown on excessively polluting aluminium smelters with help prices to remain firm. Aluminium demand will receive a boost in the mid-term, as automotive production is likely to be on an upsurge. Even if automotive production does not increase, automotive material substitution will prevent aluminium production from dropping.
The commodity prices have hit an upward trajectory in the current year and are likely to continue the momentum in both near term and medium term period. The oil prices are likely to rise on production cuts by oil majors and natural gas prices are likely to hit considerable highs on supply discrepancies. On the other hand, the price movements of coal, coking coal and thermal coal is largely dependent on China’s coal policy. The agriculture prices will be on a high on the back of rapidly growing demand while fertilizers are likely to rise as well on better demand and growing produce in the sector. Further, the prices of precious metal is also likely to rise on nuclear threats and geopolitical tensions. Non-ferrous metal prices surged during the last one year. The prices are expected to hold steady in the coming times. Activity in China will play a major role for the price movement of non-ferrous metals as the country is one of the largest consumers and producers of non-ferrous metals. The commodities are forecast to either re-balance in the near term or exhibit a bullish undertone, thus safeguarding higher profits for businesses trading in commodities.