Aluminium Heading for a Risky Fall
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.