Aluminium markets witnessed turmoil at the start of the second quarter of the current year. Fears of worsening supply shortages following Rusal sanctions pushed the price of the light metal to its highest in over six-and-a-half years at $ 2245/MT during April. Shortages of aluminium accelerated throughout April, reaching an 87-month high.
As with any traded commodity, the price of aluminium has been partly driven by speculation. However, demand continues to provide a headwind for prices. Demand growth for the light metal has lost impetus from the strong expansion seen at the end of last year. The IHS Markit Aluminium PMI fell to its lowest in almost a year at 51.9 in April. The slowdown was driven by softer output and new order improvements at aluminium-intensive manufacturers worldwide, with the latter dropping to a two-year low.
Aluminium-using firms in Asia – a key driver for aluminium prices – registered the most notable slowdown in growth in April. Whilst expansions were generally stronger in the US and Europe, the survey data in these regions also indicated a loss of growth momentum.