Harbor Intelligence analyst Jorge Vazquez says aluminum prices could hit $1,700 per metric ton by June. On Thursday, the spot aluminum contract on the London Metals Exchange closed at $1,487 per metric ton.
Aluminum prices touched a four-year low last month hitting $1,455. While metal prices have fallen across the board, aluminum’s troubles were compounded by the shutdowns in the automotive industry.
The automotive sector accounts for the bulk of global aluminum demand. The US automotive industry has also reopened which should support demand for metals.
“With all the reopenings taking place, demand is getting better relative to the month of April, so funds tend to flow to cyclical investments such as aluminum,” Vazquez told Bloomberg.
Vazquez added: “Also, aluminum is energy in solid form, energy is the most strategic cost component when producing aluminum.”
He added: “When oil prices go higher, aluminum prices tend to go higher.”
Energy costs can make up almost one-third of the costs for aluminum smelters, according to industry estimates. Vazquez said: “At today’s oil price, aluminum prices tend to average around $1,700/ton.”
Energy prices have regained ground after the West Texas Intermediate contract turned negative last month. Goldman Sachs said that oil and livestock are the two commodities to watch in 2021.
If aluminum prices rise to the level Vazquez forecasts, it would benefit aluminum producers. Alcoa and Century Aluminum are the leading US-based aluminum producers. US President Donald Trump imposed a 10% tariff on US aluminum imports in 2018 citing them as national security risks. However, the tariffs did not manage to guard against the sharp fall in prices.
For more information on commodity trading please see our selection of some of the best online commodity brokers. Alternatively, if you wish to trade in stocks of commodity producers, please see our selection of some of the best online stockbrokers.
Trusted & Regulated Stock & CFD Brokers
What we like
- 0% Fees on Stocks
- 5000+ Stocks, ETFs and other Markets
- Accepts Paypal Deposits
Min Deposit
$200
Charge per Trade
Zero Commission on real stocks
64 traders signed up today
Visit Now67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Available Assets
- Total Number of Stocks & Shares5000+
- US Stocks
- German Stocks
- UK Stocks
- European
- ETF Stocks
- IPO
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 Zero Commission
- NASDAQ Zero Commission
- DAX Zero Commission
- Facebook Zero Commission
- Alphabet Zero Commission
- Tesla Zero Commission
- Apple Zero Commission
- Microsoft Zero Commission
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account
- Paypall
- Skrill
- Neteller
What we like
- Sign up today and get $5 free
- Fractals Available
- Paypal Available
Min Deposit
$0
Charge per Trade
$1 to $9 PCM
Visit Now
Investing in financial markets carries risk, you have the potential to lose your total investment.
Available Assets
- Total Number of Shares999
- US Stocks
- German Stocks
- UK Stocks
- European Stocks
- EFTs
- IPOs
- Funds
- Bonds
- Options
- Futures
- CFDs
- Crypto
Charge per Trade
- FTSE 100 $1 - $9 per month
- NASDAQ $1 - $9 per month
- DAX $1 - $9 per month
- Facebook $1 - $9 per month
- Alphabet $1 - $9 per month
- Telsa $1 - $9 per month
- Apple $1 - $9 per month
- Microsoft $1 - $9 per month
Deposit Method
- Wire Transfer
- Credit Cards
- Bank Account