The three-month aluminium price rose to $1,782.50 per tonne on Wednesday August 5, the highest intraday price since January 27, before settling back to $1,767 per tonne at the 5pm kerb close.
Some market participants believed that the 9.2% price increase from July 1 to August 5 was not connected to the aluminium market’s weak fundamental backdrop, and rather was the result of speculative cash flows entering the market over the period.
“The price has rallied unexpectedly because, when you look at the rest of the market, things are still a bit up in the air. “We have seen lots of interest but there really are questions over whether this rally is sustainable, because it’s not following aluminium’s fundamentals.”
Fresh speculative long positions on aluminium from cash trading adviseries (CTAs), funds and other financial institutions, which were hedging in the aluminium market, have...