Global aluminium short-term outlook August 2022

The official LME cash price is currently trapped within a narrow range. There is little conviction in the market as to which way prices should move. During August, the price generally traded with the US$2400-2460/t with falls below US$2400/t attracting dip buying. Indeed, the price responded positively to news that the Chinese government had stepped up efforts to support an economy damaged by repeated Covid lockdowns and a slump in the property market. However, the rally proved to be short-lived. Meanwhile the continued stream of capacity closures in Europe has so far failed to provide the catalyst for a definitive breakout above US$2500/t. Worries over the health of the global economy will keep prices in a sideways pattern over the very short term. Market focus is very much dominated by events in China, particularly over the announcement of further Covid restrictions in a number of large cities.