Why Have Aluminum Prices Declined Over The Past Year?

-3.41%
Downside
33.79
Market
32.64
Trefis
AA: Alcoa logo
AA
Alcoa

Aluminum is a metal which has extensive industrial applications particularly in the commercial construction, automotive, aerospace, and packaging sectors. As a result, consumption of aluminum is tied to industrial growth. Weak demand for the metal as a result of subdued economic growth in China, which accounts for around half of the world’s aluminum consumption, and contraction in Chinese manufacturing activity (as indicated by Manufacturing PMI data — a composite measure of economic activity in the manufacturing sector: a PMI reading above 50 indicates growth in activity, whereas a figure below 50 indicates a contraction) has resulted in a steady decline in aluminum prices over the past year or so.

Decline in Aluminum Prices Last Year

 

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Alcoa

 

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