The falling price of aluminium on the London Metal Exchange, combined with a weakening supply picture in Europe, is putting pressure on smelters' profit margins, but there are no reports of production cuts in the market yet, Fastmarkets understands.
The LME three-month aluminium price benchmark hit a low of $1,579 per tonne during trading on March 19, its lowest since September 2016.
Although LME aluminium recovered back to $1,630 per tonne by the 5pm close on the same date, the price was still 9.5% lower than at the start of 2020.
Despite other metals in the complex recovering during morning trading on March 20, aluminium remained in a downtrend following a 65,000-tonne delivery into LME-listed warehouses today.
Current LME aluminium price levels mean aluminium smelters' profit margins are extremely thin, sources said.
"Smelters in the United States are taking the hit, they were already struggling at $1,800 per tonne. Now, I don't know how long they'll last unless Trump does something," a European trader said.
"Realistically, when you hit below $1,600 per tonne it makes everything tough across the aluminium supply chain. It's...