Aluminum futures dropped to $2,520 per tonne in December, marking their lowest level in three months. The decline reflected broader downward pressure on industrial metals in dollar-based markets, driven by a strong US dollar and ample metal supply amid uncertain demand.
Aluminum drops to three-month low
Recent data revealed that China’s primary aluminum production rose by 3.6% year-over-year in November, continuing the year’s trend of increased output as rainfall in Yunnan bolstered hydropower availability for smelters. Additionally, Beijing’s decision to allow the yuan to weaken contributed to lower base metal prices in dollar terms, particularly affecting markets tied to Chinese manufacturing hubs.
Alumina prices soar
This downward trend was offset slightly by soaring alumina prices due to supply disruptions and Beijing’s move to eliminate tax rebates on semi-manufactured aluminum exports in December. The policy change is expected to remove approximately five million tonnes of aluminum from the global market, according to industry estimates.
