Alu­minium Head­ing for a Risky Fall

The Economic Times - - Commodities Plus -

New York: Af­ter steel comes alu­minum. Fu­tures traders in China have flocked to the light­weight metal used in beer cans and car parts, stok­ing a rally and set­ting the mar­ket up for a po­ten­tial slump in the sec­ond half as smelters fire up new or idled smelters. Alu­minum is trad­ing around a 10-month high on the Shang­hai Fu­tures Ex­change af­ter vol­ume more than quadru­pled in four days to about 1.04 mil­lion con­tracts on Mon­day, the most since De­cem­ber. That echoes the per­for­mance of steel re­in­force­ment bar last week, when prices rose 20% in four days as trad­ing ballo- oned. While strong de­mand and tight sup­plies in the first quar­ter drove up alu­minum fu­tures, the risk is grow­ing that prices will climb too far.


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