Global aluminium short-term outlook October 2021

The aluminium market service short term outlook (STO) is published monthly and provides a forecast of aluminium supply and demand fundamentals over the next two-years. Sellers were in the ascendency in the second half of October as Chinese coal prices fell. October turned out to be a month of two halves. The LME price raced to a month official cash high of US$3179/t and hit US$3200/t in intra-day trading on 18 October. Since then, the price has pivoted to a downward trajectory, trading between US$2650– 2680/t. At the time of writing, prices had moved tentatively above the US$2700/t level on dip buying. The sharp drop in prices is not unique to aluminium, the entire base metals complex has taken a hit. Just as the run up prices was overdone; we think the sell-off has been excessive. China’s supply woes are not going to go away anytime soon on lower coal prices.